### **Company Overview** CreditAccess Grameen Ltd (CAGL) is India’s **largest NBFC-MFI (Non-Banking Financial Company – Microfinance Institution)**, with over **26 years** of experience in inclusive finance. Headquartered in **Bengaluru**, the company is promoted by **CreditAccess India B.V.**, a Netherlands-based firm with deep expertise in micro and small enterprise financing. CAGL primarily serves **low-income rural women entrepreneurs**, offering tailored financial solutions across all stages of their financial lifecycle. CAGL operates as a **one-stop financial services provider**, blending a **high-touch, high-tech model** to serve deep rural India. Its mission is to become the **preferred financial partner** for underserved households, evolving beyond traditional microfinance into broader retail finance and non-credit services. --- ### **Core Business Model & Market Positioning** - **Rural Focus**: 86–88% of borrowers are located in **rural areas**, with strong penetration in deep hinterlands. - **Women-Centric Lending**: Over 90% of borrowers are women, empowering them through **collateral-free loans** for income generation and household needs. - **Market Leadership**: - Holds **6.9% market share** in India’s overall microfinance industry. - Dominant player with **17.6% share of gross loan portfolio** among NBFC-MFIs. - Operates **2,063 branches** across **423 districts** in **16 Indian states and Puducherry**. - **Strategic Expansion**: - Follows a **contiguous district-based expansion strategy**, prioritizing cultural familiarity and replication of best practices. - Averages **5–6 branches per district**, each serving a **25–30 km radius** to ensure localized delivery and risk diversification. - **Risk Mitigation**: - **94% of districts account for <1% of Gross AUM**, ensuring minimal geographic concentration risk. - No single district contributes more than 3–4% to total assets. --- ### **Product Portfolio & Customer Lifecycle Approach** CAGL offers a **diversified product suite** aligned with its **“Evolve with Customer”** philosophy, supporting financial needs across the borrower’s journey: #### **1. Group Loans (GLP)** – *Core Microfinance* - **Ticket Sizes**: ₹1,000 to ₹1.75 lakh - **Tenure**: 3 to 36 months - **Use Cases**: - **Income Generation** (45–50%): Animal husbandry, trading, petty businesses - **Home Improvement**, **Family Welfare**, **Emergency Needs** - **Flexible Repayment**: Weekly, bi-weekly, monthly; **no prepayment penalties**. - **Progressive Credit Release**: Customers unlock higher-ticket loans upon repayment. #### **2. Retail Finance Loans** – *Growth & Diversification* Launched in 2016, this segment is rapidly expanding, targeting **graduated microfinance customers** with higher income and stable cash flows. - **Target Customers**: Existing borrowers with ≥2 years’ history, income >₹3 lakh/year. - **Product Lines**: - **Individual Unsecured Business Loans** (up to ₹2.5 lakh) - **Two-Wheeler Loans** (avg. ₹80,000) - **Mortgage-Backed Business Loans** (up to ₹20 lakh) - **Affordable Housing Loans** (₹5–20 lakh, up to 20-year tenure) - **Gold Loans** (piloted) - **Revenue Contribution**: Grew from **4% in Q2 FY25 to 11% in Q2 FY26**. - **AUM Share**: Retail Finance now accounts for **~5.9% of total AUM**. --- ### **Strategic Shifts & Growth Drivers** #### **1. Portfolio Diversification** - **Shift in AUM Mix**: Aiming to balance **secured vs. unsecured loans (50:50)** over 2–3 years. - Secured loans: Affordable housing, two-wheeler, property-backed business loans. - **Retail Finance Target**: **12–15% of total loan book by FY28**. #### **2. Long-Term Lending Trend** - **Increased Adoption of 3-Year Loans**: - Share in GLP rose from **29% (2 years ago) to 44.9% (Oct 2025)**. - Loan tickets of **₹75,000+** are now structured with **3-year tenors** to **improve repayment serviceability**. - **Impact**: Supports customer affordability and strengthens retention. #### **3. Customer Retention & Loyalty** - **87% borrower retention rate** – one of the highest in the sector. - **Long-Term Customers**: 25% have been with the company for **6+ years** (up from 12% in FY21). - **33% of borrowers are unique to CAGL**, indicating strong brand loyalty and exclusivity. #### **4. Customer Acquisition** - Added **850,026 new borrowers** in the past 12 months. - Key growth states: - **Other States (53.0%)**, Maharashtra (17.4%), Tamil Nadu (15.9%). - Focus on **new-to-credit customers** – 43% of new borrowers in Q1 FY26 were first-time borrowers. --- ### **Geographic Footprint & Market Penetration** | **Key State** | **Gross AUM Share (FY25)** | **Market Share in State** | |---------------|----------------------------|---------------------------| | Karnataka | 31.1% | 23.0% | | Maharashtra | 21.5% | 19.3% | | Tamil Nadu | 19.0% | 10.5% | | Madhya Pradesh| 8.0% | 9.8% | - **Top States**: Contribute over **70% of AUM**, indicating strong presence in core markets. - **Strategic Diversification**: Over **50% of new borrowers now come from non-core states**, reducing concentration risk. --- ### **Technology & Digital Transformation** CAGL has built a **scalable, agile digital ecosystem** to enhance efficiency, customer experience, and risk management: #### **1. Core Platforms** - **Grameen Maitri**: Unified field app used by **18,000+ field staff** for end-to-end loan lifecycle management (onboarding to closure). - **Core Banking System (R19)**: Handles **4.7 million customers** and processes **~2 million transactions daily**. - **Microservices Architecture**: - **150+ reusable APIs** via Enterprise Service Bus (ESB) - **Common Data Hub**: Single source of truth for master data - **Datamarts**: Enable self-service analytics - **Low-Code/No-Code Platforms**: Accelerate product development #### **2. Automation & AI** - **Robotic Process Automation (RPA)**: **150+ automated processes** (disbursements, remittances, collections). - **Business Rule Engine (BRE)**: Powers **risk-based pricing**, underwriting, and automated decisioning. - **AI Chatbots**: Support internal helpdesk and field staff with **100+ known error scenarios**. - **Predictive Analytics**: Leverages **non-traditional data** for credit scoring and cross-sell targeting. #### **3. Customer-Facing Digital Tools** - **Grameen MAHI App**: - Available in **10 languages**, **200,000+ registered users** - Features: Loan balance tracking, repayment via UPI, eligibility checks, repayment reminders - Enables **cross-selling** of retail finance and insurance products - **Digital Collections**: **10.6% of collections** are now cashless (UPI, BBPS, AEPS). - **Digital Onboarding**: Over **750,000 customers onboarded digitally**. --- ### **Operational Excellence & Risk Management** - **Asset Quality**: - Strong performance even under credit stress: - **PAR 30+ for unsecured graduated loans**: ~70 bps (Dec 2024) - **2% PAR (30 days)** for unsecured business loans (Jul 2025) - **Collection Efficiency**: Maintained **>98%** (excluding arrears). - **Credit Ratings**: - **AA-/Stable** from Ind-Ra, ICRA (highest standalone MFI rating). - CRISIL: ‘Positive’ outlook due to strong governance and ESG compliance. - **Liability Franchise**: - **74% long-term borrowings** (domestic NCDs & foreign loans). - Tapped **USD 200 million syndicated social loan** from institutions in Taiwan, Singapore, UAE, etc. - Target: **25–30% foreign funding by FY28**. --- ### **ESG & Social Impact** - **100% of portfolio is ESG-compliant**, financing **climate-resilient livelihoods** (e.g., agroforestry, water conservation). - **Third-party study (3,189 women)**: Confirmed **economic upliftment, women’s empowerment, and improved quality of life**. - **Client Protection**: - No prepayment penalties - Transparent pricing - **Gold Standard certification** in Client Protection Principles (2022) - **Employee Base**: **21,333 employees** as of June 2025; **97.8% hired locally**, supporting community engagement. --- ### **Key Differentiators** 1. **Lowest Lending Rates in MFI Sector** (18–22%) due to **low operating costs and efficient operations**. 2. **Strong Retention & Customer Loyalty** (87% retention, 25% long-term borrowers). 3. **Deep Rural Penetration** with **minimal competition** in hinterlands. 4. **Scalable, Integrated Digital Platform** enabling **real-time decisioning and automation**. 5. **Strategic Diversification** from microfinance to **retail and secured lending** for portfolio stability. 6. **Proven Resilience**: Demonstrated cross-cycle performance during **pandemic, demonetization, inflation**.