- **Ujjivan Small Finance Bank began as a microfinance institution lending to groups of low-income women in southern India, and has since transformed into a scheduled commercial bank that now serves nearly 100 Lakhs customers across 26 states.** That origin story still shapes everything: the bank builds relationships by first lending small, unsecured amounts to customers the formal banking system overlooks, then graduating them into home loans, vehicle finance, business credit, deposits, and investments over time - a customer lifecycle approach that turns a microfinance entry point into a full banking relationship. The recurring philosophy is to build a balanced and increasingly secured loan book, funded by a granular retail deposit franchise, with technology running through every step of acquisition, underwriting, and collection. # Business segments Five engines at different stages - a microfinance origin that still anchors half the loan book, a fast-growing secured housing franchise, a wholesale and institutional banking arm, and a set of younger secured lending bets in MSME, vehicles, gold, and agriculture - each fed by the customer relationships and deposits the earlier engines built. ## 1. Micro Banking: the relationship factory **Group and individual loans to low-income households, mostly women, remain the bank’s largest portfolio and the primary feeder of customers into every other part of the franchise.** - **The entry door for millions** - the segment provides small-ticket loans through joint liability groups (average ticket INR0.67 lakh) and individual unsecured loans (INR1.39 lakh), with the group loan book alone at INR14,696 crores as of March 2026. More than 80% of individual loan customers historically came from existing group loan borrowers, making this the pipeline that fills the rest of the bank. - **Unique customers, not shared borrowers** - over 55% of group loan customers and 66% of individual loan customers have no overlap with other lenders, and the share of customers borrowing from four or more lenders has dropped to near zero, which means the bank is lending to its own franchise rather than competing in an overleveraged pool. - **Ground-force collection with digital overlay** - collection efficiency ran above 99.7% through Q4 FY26, achieved by a field-staff network the bank describes as among the most productive in the industry, while digital repayments have reached 45% of loan collections. - **Guardrails reshape the playbook** - the microfinance sector faced significant stress in FY26 from overleveraging and regulatory tightening, so the bank shifted toward existing customers, lower-risk geographies, affordability-linked lending, and in-house scorecards that track 23 leading indicators on the individual loan book. ## 2. Affordable Housing & Micro Mortgages: the secured anchor **Home loans to first-time buyers in Tier II, III, and IV markets - overwhelmingly for self-occupied homes - form the bank’s largest secured portfolio and the natural graduation path for micro-banking customers.** - **Built for the first-time buyer** - the combined portfolio of INR10,477 crores serves economically weaker sections, low-income, and middle-income groups, with average tickets of INR17.22 lakh for affordable housing and INR6.68 lakh for micro mortgages. Fully 94% of loans are for self-occupied residential property, so the book is anchored in homes people live in, not speculative construction. - **Conservative underwriting by design** - average loan-to-value is just 48%, the fixed-obligation-to-income ratio stays below 50%, and on-time repayment rates were 89.4% in Q4 FY26, reflecting a credit approach that prioritises ability to pay over loan size. - **Referrals drive the pipeline** - over 60% of micro mortgage disbursements come through referrals, and the bank retained more than 1,100 existing clients with outstanding loans of INR164 crores in FY25, double the previous year, showing that satisfied homeowners bring in the next wave. ## 3. Financial Institutions & Government Banking: the wholesale balance **Lending to NBFCs, MFIs, and housing finance companies while simultaneously raising institutional deposits and current accounts provides a low-risk asset book and a large liability pool.** - **Rated counterparties, clean repayments** - over 95% of financial institution customers carry a credit rating of A- and above, and collection efficiency has been 100% month-to-month, making this a book with near-zero credit loss. - **Liabilities are the hidden half** - the segment mobilised INR13,873 crores in deposits, current accounts, and term money from banks and institutions, growing 34% year-on-year, which means the wholesale desk funds a material portion of the bank’s lending. - **Product expansion beyond term loans** - the working capital demand loan product launched in October 2024 now contributes over 20% of the FIG asset book, and the bank has added escrow programmes and government empanelments. ## 4. MSME Lending: the business-banking build **Secured loans against property and working capital to small and medium enterprises, growing fast from a revamped strategy and digital underwriting.** - **Loan against property as the anchor** - the INR3,230 crore portfolio is built on secured lending, with loan against property as the core product, complemented by working capital facilities and supply chain finance sourced through fintech partnerships. - **Digital underwriting, lower stress** - a dedicated loan origination system pulls GST, banking, and income-tax data automatically, and an early warning system flags risk proactively, helping bring gross non-performing assets down from 5.5% to 3.6% over FY26. - **Relationship model taking shape** - the MSME segment is transitioning from standalone lending to a 360-degree approach that combines credit with liability accounts and transaction banking, aiming to become the primary banker to semi-formal and formal businesses. ## 5. Vehicle Finance, Gold Loans & Agriculture Banking: the secured specialists **Three smaller, high-growth secured books - two-wheeler and electric three-wheeler financing, gold-backed loans, and farm credit - each run on distinct sourcing and underwriting models tailored to their customer base.** - **Dealer-driven two-wheeler finance** - the INR944 crore vehicle book sources 93% of customers through over 1,100 dealerships, with scorecard-based approvals in under five minutes and nearly half of disbursements completed within two days, making speed the competitive edge. - **Gold loans for urgent liquidity** - the INR62 crore gold loan book is 95% internally sourced, with over 40% of monthly business coming from referrals, and uses a mobile onboarding tool called Swaran Saarthi for doorstep sourcing, targeting the unorganised segment including agriculture-linked and small business customers. - **Cluster-based farm lending** - the INR731 crore agriculture portfolio is fully secured with gross non-performing assets of just 0.6%, sourced almost entirely through internal channels across 310 branches in 10 states, with GPS-based data capture and state-wise collateral policies keeping underwriting tight and local. # Retail Liabilities & Branch Banking **A granular, retail-driven deposit franchise built through dedicated sales teams, digital account opening, and specialised channels for everything from salary accounts to government bodies - this is the funding engine that lowers the bank’s cost of money.** - **Retail deposits dominate** - retail term deposits plus current and savings accounts totalled INR31,955 crores, or 70% of all deposits, with the current-and-savings-account ratio reaching 28.6% by March 2026, up from 13.5% six years earlier. - **Dedicated sales muscle in top cities** - a separate sales vertical and relationship management team focuses on acquisition and retention in the top 30 cities, while segment-specific channels cover non-resident Indians, high-net-worth individuals, corporate salary accounts, and local government bodies. - **Digital acquisition without the branch** - customers can open savings accounts, fixed deposits, and individual current accounts through do-it-yourself digital journeys and video-based know-your-customer verification, reducing the cost of bringing in new depositors. - **TASC and institutional deposits add stickiness** - the trust, association, society, and club channel serves government departments, educational institutions, hospitals, and religious bodies with customised collection and payment solutions, creating deposit relationships that are less rate-sensitive than retail term deposits. # Digital Banking & Technology **A cross-cutting technology backbone that powers acquisition, underwriting, collections, and efficiency - analytics alone contributed an estimated INR1,100 crores of incremental business and INR38 crores in recoveries from written-off pools in FY26.** - **Full-stack digital platform** - the Hello Ujjivan app runs in 11 languages with voice and chatbot capabilities, the internet banking platform offers over 200 features in nine languages, and 93.7% of all transactions now flow through digital channels. - **Analytics as a profit centre** - the data stack processes over 10.5 crore transactions and over five lakh loans per month, refreshing more than 1,200 key data elements near real-time, and feeds predictive artificial intelligence across the entire credit lifecycle from application scoring to collection targeting. - **Automation that saves money** - 69 processes have been automated through robotic process automation, saving the equivalent of 99 full-time employees and INR15.9 crores in FY26 alone. - **Security built in, not bolted on** - the bank holds ISO 27001:2022 certification, runs a dedicated red team for ethical hacking and a blue team security operations centre, and has cut digital payment frauds by two-thirds year-on-year through real-time fraud detection and mule-account identification tools. # Group structure and partners **A publicly held bank with no promoter, formed through a reverse merger with its former holding company, and supported by partnerships that extend its product reach without building everything in-house.** - **No promoter, fully public** - the reverse merger with Ujjivan Financial Services in April 2024 cancelled all promoter-held shares, leaving 100% of equity with public shareholders: domestic institutions at 31%, foreign institutions at 17%, and retail and others at 52%. - **Partnerships for products the bank does not build** - a co-branded credit card with BOB Cards, a three-in-one savings-demat-trading account with SMC Global Securities, and digital fixed-deposit sourcing extend the product shelf without the bank manufacturing everything itself. - **Licences that open new doors** - an authorised dealer licence from the RBI in September 2024 enabled foreign exchange transactions and the launch of a treasury forex desk, while SEBI registration as a banker to an issue in February 2025 added capital-market capabilities.