Spandana Sphoorty Financial is a rural lender that turns small groups of women into a mutual guarantee, so a vegetable vendor or a tailor who has no collateral can get a loan. It began in 1998 when the founder lent a ragpicker in Guntur the money to buy her own cart-something no bank would do-and the borrower repaid from her higher earnings and started saving. That same approach now reaches more than 1.1 million women across 20 states: doorstep service, tiny ticket sizes, and a cost structure built to make a margin on loans that are too small for anyone else to bother with.
Business segments
A single engine-group microfinance for low-income women-delivered through a vast branch network, with a small secured-lending subsidiary being folded back in.
1. Joint Liability Group microfinance: the core lending engine
The company lends to groups of 6-10 women who co-guarantee each other, collects weekly or monthly at their doorstep, and earns the spread between its cost of borrowing and a lending yield of 23-26%.
- Tiny loans, deliberately - the main product, “Abhilasha / Chethana,” carries a ticket size of ₹25,000-₹80,000 at 21.3% interest, and the company caps its maximum loan at ₹80,000, which it calls one of the lowest ceilings in the industry. Average customer indebtedness is about ₹36,000, roughly 15-33% below the industry average, so borrowers are less stretched than they would be with competitors.
- Doorstep collection, now on a weekly beat - the model was historically built on monthly collection in the first ten days of the month, but management has shifted to a weekly repayment rhythm so that new-member acquisition, disbursement and collection happen every day, making the field force scalable. As of March 2026, 349 of the 1,457 branches operate on the weekly model, and collection efficiency in those branches stays above 99%.
- New underwriting rules reset the book - from April 2025, 80% of the portfolio has been sourced under stricter credit rules, and after eight months of seasoning that cohort shows 99.7% collection efficiency. The company also limits lender overlap: only 4.8% of customers have three or more lenders beyond Spandana, and 34% are exclusive to Spandana.
- A branch-only network with no middle layers - there are no regional or zonal offices; 1,457 branches report straight to the corporate office in Hyderabad, and no single branch accounts for more than 0.3% of assets. The top five states-Madhya Pradesh, Bihar, Odisha, Andhra Pradesh and West Bengal-together make up 59% of the loan book, but even the largest district is capped at 2.3%.
- Funding from 47 lenders keeps the spread wide - the company borrows from banks, NBFCs, development finance institutions and foreign portfolio investors, with a marginal cost of borrowing at 12% in early 2026 and a blended cost expected below 12.5%. That leaves a net interest margin of 9.9% on a portfolio yield of roughly 25%.
Group structure and partners
A listed parent with a microfinance licence, a small secured-lending subsidiary being merged back in, and a private-equity backer.
- Spandana Sphoorty Financial Ltd is the parent, registered with the RBI as a non-deposit-taking NBFC-MFI, and has not accepted any public deposits.
- Criss Financial Ltd, in which Spandana holds 99.92%, is an NBFC-Investment and Credit Company that offers loans against property and nano-enterprise loans from its own 160 branches and 9,405 staff; a merger by absorption into Spandana was approved by the board in June 2026 and is expected to take another 5-6 months.
- The company is a member of the two national microfinance industry bodies, MFIN and Sa-Dhan, which advocate with the regulator on behalf of the sector.