• Asset growth: ESAF closed Q2 at 25% asset growth, within its 22 to 25% guidance. Microfinance growth was almost stagnant as gold, mobility, mortgage and agri books grew.
• Portfolio mix: Under its MARG strategy—micro, retail, agri and gold—the bank shifted from 70% unsecured and 30% secured two years ago to 65% secured and 35% unsecured. It plans for 70% retail and other lending, including gold, MSME and agri, and 30% micro.
• Microfinance focus: Management said it is not moving away from the micro customer segment, but will offer more secured and individual products and livelihood finance rather than relying solely on unsecured group loans. Pure microfinance loans are intended to remain at 30 to 35%.
• Deposits and margins: Term deposits grew 29%; 92% of total term deposits are retail, with 24% from the NR segment and close to 30% of depositors being senior citizens. Despite 7.9% NIM, management expects margins to stay above 7%, with FCNR and the current repo hike not expected to have an immediate material impact.
• Returns target: Management’s aspiration is 2% RoA for FY28, supported by long-term credit costs below 3%. It also plans to become more tech-driven through a new CBS and associated systems.