Ujjivan SFB adjusts loan growth guidance amid microfinance stress

economictimes.indiatimes.com:

«But all in all, I think it is something that in this business it happens from time to time. We are well positioned to handle this situation and our response being done quickly is one of the important guidelines that we have shown that we are aware of this, we are well entrenched in this business and our ability to react is very important,» says Ittira Davis, MD & CEO, Ujjivan SFB.

You have cut the loan growth guidance for FY25 and if we understand correctly, that is largely on the back of the concerns in the MFI segment. Can you just clarify and elaborate as to what is the reason for the same?
Ittira Davis: Yes, we have revised the guidelines and the guidance on Friday and that is, as you rightly said, primarily due to the microfinance portfolio and the stress that we have seen in pockets across the country and we feel that that stress will prevail for part of this year and therefore the credit cost has been moved up to 1.7% from a higher range of 1.5.

And as a result of that we also have put in place during COVID a very responsive team on the ground and based on the feedback that we got, granular feedback from the ground, we have taken this decision to go slow in certain pockets and to watch carefully the pockets in the country which have been affected and that is the reason why we in turn had to lower the growth guidance.

Unlock Leadership Excellence with a Range of CXO Courses