Microfinance institution (MFI) Arohan Financial Services is eyeing a growth of 20 per cent in its outstanding loan portfolio during the current financial year, its MD Manoj Nambiar said.
The MFI closed the 2024-25 fiscal with its outstanding loan portfolio at Rs 6,100 crore, he said.
"The microfinance sector is clearly showing green shoots on collection and portfolio quality with guard rails in place. We closed last year with an outstanding portfolio of Rs 6,100 crore. We aspire to grow by about 20 per cent this fiscal," he told PTI.
Arohan operates through 1,102 branches, serving around 21 lakh customers.
"In a very difficult year, 2024-25, Arohan had reported a profit with gross NPA at 2.85 per cent and net NPA at 0.53 per cent," Nambiar said.
In 2024-25, the company's net profit stood at Rs 110 crore.
Nambiar said MFIs are playing a crucial role in promoting financial inclusion.
"A healthy microfinance ecosystem needs to attract long-term capital," he said.
"For the MFI sector to double its outreach to make formal credit available, an estimated fresh equity investment of USD 4 billion will be required," he added.
Nambiar said this will also help the entities to leverage debt from the banking sector.
Maintaining that collection is an integral part of lending, Nambiar said there should be a shift towards digital and cashless transactions to improve efficiency and reduce costs.
For recovery, enforcement mechanisms within the code of conduct of RBI should be allowed, he said.
Arohan's networth, at present, stands at Rs 2,025 crore with a capital adequacy of 34.09 per cent.
Meanwhile, the company recently appointed Milind Nare as deputy CEO and Ketan Agrawal as deputy CFO.
