Satin Creditcare to Launch Alternative Investment Fund with ₹500 Crore Maiden Debt Fund

Satin Creditcare, a prominent micro-loan provider, has announced its strategic move to launch an Alternative Investment Fund (AIF) named Satin Growth Alternatives in Fiscal Year 2026. This new entity will operate as a separate subsidiary, offering greater flexibility in supporting various enterprises. The AIF's primary focus will be on financing Climate and ESG (Environmental, Social, and Governance) initiatives, Micro, Small, and Medium Enterprises (MSMEs), and women-led businesses, thereby diversifying Satin Creditcare's existing portfolio of microfinance, housing, and MSME lending.

The maiden debt fund under this AIF will have an initial corpus of ₹500 crore. The first scheme is anticipated to be around ₹100 crore, with individual investments, or ticket sizes, ranging from ₹4-6 crore. Satin Creditcare intends to sponsor up to 20% of this initial corpus and will actively seek other investors.

**Impact** This diversification into an AIF structure allows Satin Creditcare to tap into new investment pools and provide targeted financial support to sectors with significant social and environmental impact. This strategic initiative is expected to enhance its financial performance and market positioning. Furthermore, the company has provided strong guidance for its core operations. It is on track to achieve its projected loan book growth of 10-15% for FY26, bolstered by an aggressive branch expansion plan which has already seen 170 new branches opened in the first half of FY25. Satin Creditcare aims to keep its credit costs significantly below the 4.6% recorded in FY25. Net Interest Margins (NIMs) are projected to be healthy, around 13.5-14%, supported by moderated borrowing costs and effective risk-based pricing.

**Difficult Terms** * **Alternative Investment Fund (AIF)**: A pooled investment vehicle that collects funds from sophisticated investors for investing in areas like venture capital, private equity, or hedge funds, distinct from traditional public markets. * **MSME**: Micro, Small, and Medium Enterprises; businesses characterized by their size in terms of investment, turnover, and employee count. * **ESG**: Environmental, Social, and Governance. A framework used to evaluate a company's commitment to sustainability, ethical practices, and corporate responsibility. * **NIM**: Net Interest Margin. A profitability metric for financial institutions, calculated as the difference between interest income generated and interest paid out to lenders, expressed as a percentage of interest-earning assets. * **Credit Cost**: The financial loss incurred by a lender due to the inability of borrowers to repay their loans. * **Basis Points (bps)**: A unit of measure equal to 1/100th of 1% (0.01%). Used to express small changes in percentages. * **Securitisation (Direct Assignment)**: A financial process where assets (like loans) are pooled together and transformed into tradable securities. Direct assignment is a method within this process where the originator transfers the rights and obligations of the loan directly to the investor. * **SRO**: Self-Regulatory Organisation. An entity that exercises oversight over its members, setting and enforcing rules and standards.