Micro Banking
The First Step Forward
The Micro Banking business operates through group and individual lending models with strong local presence, enabling consistent customer engagement, effective monitoring and controlled portfolio quality. During the year, the Bank adopted a calibrated growth strategy with sharper focus on portfolio quality, prudent customer selection and tighter control over borrower behaviour, reflecting a conscious shift towards sustainable growth underpinned by disciplined risk management.
FY 2025-26 witnessed a broader recalibration across the Micro Banking ecosystem. Credit discipline strengthened, borrower behaviour evolved and disbursement trends stabilised following earlier stress in the sector. The Bank responded by focusing on existing and well-understood customers, lower-risk geographies and affordability-led lending practices. Ticket sizes were recalibrated with greater emphasis on responsible lending and repayment capacity, while system-level risks from overleveraging and borrower overlap moderated with improved adoption of industry guardrails.
The Bank navigated the evolving environment through proactive risk management at the branch level, disciplined collections and region-specific portfolio strategies. Underwriting and origination controls were strengthened during the year, improving borrower selection and portfolio resilience. Micro Banking continues to play an important role as a feeder channel for customer graduation, with a meaningful share of customers transitioning towards higher-value and formalised banking products over time.
Performance Dashboard
Gross Loan Book
Collection Efficiency (1 EMI+OD)
Key Developments
Strengthened underwriting and onboarding frameworks to enhance borrower assessment and improve portfolio resilience
Enhanced branch-level monitoring and execution controls to support collection efficiency and early risk identification
Increased focus on affordability-led lending and disciplined ticket-size calibration in line with evolving customer behaviour
Continued emphasis on lower-risk geographies and well-understood customer cohorts as part of the calibrated growth strategy
Improved alignment with industry guardrails and responsible lending practices across the portfolio
Sustained customer graduation momentum through deeper cross-sell and progression into higher-value banking products
