2 weeks ago

Fusion Finance targets 10% of disbursements from individual loans

Fusion Finance is a company that gives small loans to people who run small businesses.

These kinds of loans are called micro loans.

Right now, the company mostly lends money to groups of people, where everyone in the group helps make sure the loan gets paid back.

Now it wants to try something new: giving loans to one person alone, without the group.

These are called individual loans.

The company says it will give these loans only to customers it already knows well and trusts.

It hopes these new loans will make up about 10 out of every 100 rupees it lends in the next two to three years.

It also wants to lend about 1,000 crore rupees through these individual loans in the next year.

To do all this, the company needs to borrow money from banks and other lenders.

It says borrowing is getting a little cheaper for it, which helps it save money.

Key facts

Company: Fusion Finance (MD & CEO: Sanjay Garyali)
New product: Unsecured, non-joint liability group (JLG) individual loans
Target customers: Annual income above Rs 3 lakh; existing customers with at least three loan cycles (roughly 3.5-4 years) running a business
Rollout timing: By mid-Q2 to existing customers; deferred from Q1 due to West Asia crisis and monsoon uncertainties
Individual loan targets: Portfolio of ~Rs 1,000 crore in 12 months; initial ticket size Rs 1.25-1.5 lakh; onboarding at least 20% of 2.5 lakh eligible customers
AUM: Rs 7,702 crore as of June 30; target Rs 10,000 crore in FY27
FY27 borrowing requirement: Rs 7,000 crore, of which Rs 1,600 crore already borrowed in Q1
Cost of borrowing: Fell to 10.1% in Q1 from 10.3%; expected to drop further by 15-20 bps, with ~Rs 600-700 crore available at 9.25-9.30% under the credit guarantee scheme

financialexpress.com · 2 weeks ago