Non-bank lender Credit Saison India is shifting its strategy to increase secured loans to 30% of its total portfolio by March 2027. The company aims to balance its current heavy reliance on unsecured personal loans while managing a Rs 25,000-crore loan book and a 1.1% gross NPA.
Credit Saison India is actively recalibrating its lending strategy to anchor its future growth in the secured loan segment. The non-banking financial company currently holds a portfolio where secured loans account for 22%, a figure it intends to increase to 30% by the end of March 2027. This pivot is primarily aimed at the Micro, Small, and Medium Enterprise (MSME) sector, with a specific focus on expanding into non-metro regions.
The lender has scaled its operations significantly, building a Rs 25,000-crore loan book within seven years. While unsecured personal loans currently make up over 75% of its total assets, the push toward secured lending, such as Loans Against Property and wholesale funding, is designed to provide better stability against market volatility. To support this growth, the company plans to expand its network from 100 branches to 150 locations over the next three years.
This strategy comes at a time when many financial institutions in India are rebalancing their loan books. Increased regulatory focus on unsecured credit growth has led many NBFCs to look for more stable, asset-backed lending avenues. By diversifying, Credit Saison India aims to manage risk while continuing to serve its core customer base. The firm remains well-capitalized with a capital adequacy ratio of 20% and has maintained a stable gross non-performing asset ratio of 1.1%, suggesting that its current underwriting processes have held up well despite the heavy exposure to unsecured loans.
From a funding perspective, the company is changing its approach to managing liabilities. Previously reliant on external commercial borrowings, it is now shifting toward local funding sources through its network of 35 banking relationships. This move helps mitigate currency fluctuation risks, a common challenge for foreign-backed financial entities operating in India. With strong backing from its Japanese parent company, which carries a top-tier credit rating, the firm has been able to optimize its cost of capital. Net interest margins have seen an expansion of 75 basis points to reach 9%, benefiting from the shift toward direct, branch-led lending models.
The success of this strategic shift will largely depend on the company's ability to maintain its asset quality while penetrating the competitive MSME market. Investors and industry observers will likely track the company's progress on its branch expansion goals, its ability to secure lower-cost local funding, and whether it can effectively scale its secured portfolio without compromising its currently healthy NPA levels.