13 hrs ago

Affordable lenders expand into LAP and MSME for higher returns

Affordable housing lenders used to focus mostly on home loans.

Now many are also lending money against property and to small businesses.

These newer loans usually earn more money than home loans.

That can improve lenders’ profits and reduce their dependence on one kind of customer.

However, the newer loans can also be riskier if borrowers do not repay.

Lenders therefore need strong checks and collection systems.

Aptus is highlighted as a lender with a significant non-housing business and high estimated margins.

The sector is expected to continue growing, but its success depends on controlling loan losses.

Key facts

Higher product yields: LAP and MSME products typically generate yields 150–200 basis points higher than housing loans.
Sector NIM: Aggregate net interest margin is estimated to have increased from 5.9% in FY20 to 7.0% in FY26.
Sector RoA: Aggregate return on assets is estimated to have risen from 3.1% in FY20 to 4.7% in FY26.
Aptus non-housing yields: Aptus Value Housing Finance’s non-housing businesses generate around 17–20% yields.
Aptus housing yields: Aptus’s housing loans generate roughly 14–14.5% yields.
Aptus blended yield and NIM: The company has an estimated blended yield of around 17% and average NIM of about 10%.
Systematix forecast: Systematix forecasts 18–23% PAT CAGR through FY29E and low-to-mid-20s loan growth.

businesstoday.in · 14 hrs ago