Aim to achieve near 4% credit cost next quarter, says Satin Creditcare CMD
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Satin Creditcare Chairman and MD HP Singh
Satin Creditcare, a micro-finance institution (MFI), aims to reduce its credit cost to nearly 4%, down from 4.23% in the third quarter, according to Chairman and Managing Director HP Singh. In a recent discussion, he outlined business projections and shared insights on the evolving funding environment for MFIs. Key highlights:
Disbursements grew 20% quarter-on-quarter. Is Satin poised for sustained double-digit growth?
Annual growth metrics offer a more reliable perspective. Typically, the first two quarters of each year see slower activity due to seasonal factors such as heatwaves and monsoons. We anticipate maintaining year-on-year growth of 10-15%, prioritizing portfolio quality over aggressive expansion.
Your loan rejection rate stands at 65%. Will this trend continue?
A 65% rejection rate aligns with our commitment to rigorous underwriting standards. We employ multiple assessment tools, including social scorecards and pin-code analysis, to identify creditworthy clients. With vast untapped markets in states like Uttar Pradesh, we focus on sustainable growth rather than compromising portfolio health. This strategy supports our broader goal of nurturing subsidiaries alongside the core business.
What is the outlook for margins?
Margins are expected to remain stable, supported by a 50-basis-point reduction in funding costs. Should the Reserve Bank of India implement further repo rate cuts, we may pass on benefits to borrowers, given our current healthy margin position.
Portfolio risk levels have declined. What drives this improvement?
We initially targeted a credit cost below 4.6% for FY26, compared to last year’s figure. After reaching 4.52% in the first nine months and 4.23% in Q3, we project closing the fiscal year near 4%. Going forward, enhanced underwriting processes aim to further reduce credit costs by approximately 1% in FY27.
Has MFI sector funding improved recently?
Smaller and mid-sized MFIs continue facing funding constraints amid broader sector headwinds. However, lender sentiment is gradually improving. The introduction of a credit guarantee scheme could accelerate this recovery, encouraging greater institutional lending.
Provide updates on branch expansion and the AIF initiative.
We opened 203 branches last quarter and plan to meet our FY26 target of 400 new branches by March. Cumulatively, 363 branches have been launched this fiscal year. Regarding the Alternate Investment Fund (AIF), regulatory approval from SEBI is pending following our December application submission.
Published on January 30, 2026
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