• Loan growth: ESAF closed Q2 at 25% asset growth, within its 22% to 25% guidance. Microfinance collections improved to 99% and slippages were minimal, while growth in gold, mobility, mortgage and agri lending offset a nearly stagnant micro book.
• Portfolio shift: Under its MARG strategy, ESAF has shifted from 70% unsecured and 30% secured two years ago to 65% secured and 35% unsecured. Its longer-term plan is 70% retail—including gold, MSME and agri—and 30% micro.
• Microfinance focus: Management said it is not moving away from low- and middle-income customers, but is broadening from unsecured group loans to livelihood and other tailored products. Pure microfinance loans are expected to remain in the 30% to 35% range.
• Funding and margins: Term deposits grew 29%, with 92% of deposits retail; 24% came from the NR segment. ESAF expects to maintain margins above 7%; FCNR and the current repo hike have not had much immediate impact.
• Profitability target: Management expects long-term credit costs to be sub-3% and said growth alongside that level would support its 2% ROA goal for FY28.