We expect microfinance to grow at 15-20 percent, while non-MFI should continue to grow 50 percent and so the overall book would grow in 35-40 percent,said PN Vasudevan, CEO, Equitas Small Finance Bank.
"The liquidity has tightened in the last two months and interest rates have gone up and with rates expected to remain at elevated level for few quarters down the line, the company has raised their deposit rates by 75 basis points across tenors," he said.
The lending rates were also hiked between 50 and 75 bps since last month across products based on tenors, he said.
However, he does not expect the loan demand to be impacted for the company with these hikes because the segments they lend to, the demand is large and supply is less, said Vasudevan.
Moreover, the loan sizes for the company are small around 2-5-10 lakhs, so increase of 50 bps does not impact the EMI of a loan of 3-4 years tenor. Neither have they seen a problem in the customers’ ability to repay loan for small changes in rates.
Going forward, the NPAs are likely to remain steady for the current year because the collections are robust, he said.
Talking about the asset under management (AUM) guidance, he said last year the non-microfinance portfolio grew by 50 percent but microfinance de-grew by 35 percent, which was a conscious decision and overall saw 15 percent growth in AUM.