Top Searches
Advertisement

Under Pressure, But Fighting Back: Manappuram Plots NPA Turnaround in Microfinance Arm

Updated: May 09, 2025 18:36

Image Source: Manappuram
Manappuram Finance Ltd. is pointing towards a recovery in its microfinance business, Asirvad Microfinance, with senior management being optimistic that gross NPAs will fall in the next quarters. The optimism comes after a phase of high stress in the microfinance book, caused by industry-wide issues and operational challenges.
 
Key Highlights:
  • Gross NPA Decline Anticipated: Following gross NPAs in the microfinance business jumping to almost 13% by the end of 2024, Manappuram's management is now projecting a consistent decline. Executives credit this optimism to exhaustive remedial steps, such as tighter underwriting, enhanced borrower discipline, and a renewed emphasis on group meetings and collection efficiency.
  • Strategic Portfolio Realignment: The firm is currently de-risking its exposure to unsecured microfinance loans, with a view to taking the microfinance book below 15% of total AUM from its current level of 21%. The emphasis is on shifting towards secured lending, including mortgage-backed MSME and auto loans, in order to de-risk the portfolio and stabilize asset quality.
  • Operational Reforms: Asirvad Microfinance has tightened the credit appraisal norms and optimized disbursements, which management feels will bring back profitability and NPAs to pre-stress levels within the next two to three quarters.
  • Growth Prospects: Withstanding losses in the microfinance business in recent times, Manappuram plans to see 10-12% growth in Asirvad, powered by better risk management and sustained demand in the segment.
  • Industry Context: The microfinance industry has witnessed increasing default risks owing to overleveraging by borrowers and external shocks, but Manappuram's aggressive measures are geared towards managing this transition and returning to a normalized risk environment.
With a well-defined plan to manage risk and improve recoveries, Manappuram Finance is gearing its microfinance operations for a steady but long-term recovery in asset quality.
 
References: Manappuram Q3 FY25 Earnings Call, The Hindu Business Line, Economic Times, Manappuram Annual Report

Advertisement

STORIES YOU MAY LIKE

Image Source: New Castle News
Grains of Grace: Tibetan Monks Weave Tranquility Through Timeless Art
Image Source: CNBC TV18
Asian Paints Share Price Sees Surge in Trading Volume Amid Market Volatility
Image Source: MSN
OnePlus 13s and Samsung Galaxy S25 Edge Face Off: What You Need to Know
Advertisement
Image Source: The Hans India
Wheels of Grit: Daily-Wager’s Daughter Races to Triple Glory at KIYG 2025
Image Source: ET Manufacturing
Forging a Greener Future: ArcelorMittal Sparks 1 GW Clean Power for Nippon Steel
Image Source: The Tribune
Leading the Learning Leap: 600+ Educators Rally for FLN & NIPUN 2027 at DEVI Sansthan's Circle 3
Image Source: Times Of India
Major Road Boost for Uttarakhand: CM Dhami Secures Key Project Approvals in Meeting with Gadkari
Advertisement
Live Blogs
Kolkata Knight Riders Battle Chennai’s Pride to Keep Playoff Dreams Afloat
Prabhsimran’s Power-Hitting Propels Punjab Kings to Commanding Win Over LSG in Dharamsala
From MI to RR: Akash Madhwal Swings Back with a Vengeance
IPL’s Six-Hitting Hotspots: Wankhede Nears 2,000 as Chinnaswamy Tops the Charts
Top Stories
Image Source: The Print
Don Bosco Tech Opens Gates to Future Greats: Admissions Begin for AY 2025–26
Image Source: YourStory
Boosting Make in India: Goyal Unveils Enhanced Credit Guarantee Scheme to Power India’s Manufacturing and Self-Reliance Drive
Image Source: Daily Mail
Thrills Rebooted: South Coast’s Favourite Park Gears Up for a Grand Comeback
Image Source: News18
Passing the Bat: Shubman’s Salute to Rohit’s Timeless Test Tenure
Advertisement
Advertisement

Follow WOWNEWS 24x7 on:

Copyright 2024 WOWNEWS 24x7. All rights reserved. The WOWNEWS 24x7 is not responsible for the content of external sites. Read about our approach to external linking.

Powered By Just Imagine