Muthoot Microfin Ltd

The company has a well-diversified portfolio across 339 districts in 18 states and union territories in India, as of September 30, 2023, and their gross loan portfolio in the top three states, namely Kerala, Karnataka and Tamil Nadu, together accounted for 51.36% of their total gross loan portfolio. Over the past five years, the company has expanded operations in North, East and West India, which has allowed them to diversify their customer base and gross loan portfolio and increase revenue from operations.

The company has a history of serving rural markets with high growth potential in the microfinance segment, and has maintained a track record of financial performance and operational efficiency through consistently high rates of customer acquisition and retention and expansion into underpenetrated areas. Their connection with rural customers has largely been driven by continuously improving their understanding of the financial needs of the rural customer segment and commitment to consistent engagement with the communities they serve.

Their robust risk management framework, customer selection methodologies, and regular end-use and payment monitoring have led to healthy portfolio quality indicators. These include high collection efficiency, stable PAR, and low rates of gross NPAs and net NPAs. The collection efficiency stood at 95.84% and 98.89% for the FY23 and the six months ending September 30, 2023. The company also held the fifth-lowest gross NPA ratio as of March 31, 2023, and by September 30, 2023, the company achieved the third-lowest net NPA ratio among the selected NBFC-MFIs, according to the CRISIL Report.