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L&T Finance’s rural business financing portfolio reaches Rs 25,000 crore | News about economics and politics
Non-bank lender aims to increase lending against properties
Rupee, Indian rupee, rupees (Photo: X@ANI)Abhijit Lele Bombay
L&T Finance’s rural business financing (RBF) book reached the Rs 25,000 crore mark in the first quarter of the current financial year after registering a compound annual growth rate (CAGR) of 26 percent between FY21 and FY24.
As a step towards further growing RBF, the non-bank lender plans to expand microloan against property (LAP) business and increase presence in markets such as western Uttar Pradesh, Maharashtra and Telangana, according to its annual report of fiscal year 24. .
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Currently, its RBF portfolio consists predominantly of group loans and microfinance. It constitutes 31 percent of the company’s retail portfolio of Rs 80,037 crore. The non-bank lender managed to disburse Rs 21,495 crore while building a portfolio of Rs 24,716 crore, showing 32 percent annual growth (YoY) in FY24. It added 1.54 million customers during the last financial year.
The past year has been characterized by sustained growth in the joint responsibility group (JLG) industry, which is the microfinance sector, supported by stable rural demand, and improved portfolio performance. The industry surpassed the Rs 4 billion assets under management milestone during the year, with a growth of around 30 percent, while adding around 10 million customers to the lending universe, according to an annual report .
Sonia Krishnankutty, chief executive, rural business finance, L&T Finance, said in a statement that over the last two years, “the primary focus of our team of over 10,000 field employees has been on selecting the right customers, maintaining connection with customers and ensuring credit discipline”. , which is essential to sustain the business model.”
Business growth was supported by a robust risk framework and continuous portfolio monitoring down to PIN code levels, ensuring superior portfolio quality with collection efficiency levels exceeding 99.7 percent, the annual report stated.
Growing smartphone penetration and the government’s push for digitalization helped increase its contribution to digital collection from 3 percent in April 2023 to over 21 percent in March 2024, increasing efficiency and reducing risks in the process, the company said.