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Ujjivan SFB Eyes Growth Amidst Geopolitical Storm
19 Mar
Summary
- Ujjivan SFB sees growth and asset quality recovery on track.
- Proposed Bihar MFI Ordinance impact expected to be minimal.
- Company plans accelerated growth in secured lending, including gold loans.
Ujjivan SFB is currently experiencing growth and asset quality recovery across various states, with management indicating these trends are proceeding as planned. The bank anticipates minimal disruption from seasonal factors like heatwaves or the restricted movement associated with upcoming multi-state elections in the first quarter. The proposed Bihar MFI Ordinance is also expected to have a limited effect.
Furthermore, the influence of the MFIN guardrail is diminishing, with the three-plus lender portfolio projected to become negligible in the coming quarters. Potential business disruptions from the ongoing US-Iran conflict are also considered limited, provided the geopolitical situation stabilizes soon. Ujjivan SFB is strategically accelerating its growth in secured lending, including gold loans, without compromising credit standards.
The bank notes a significant customer overlap of approximately 40% between its MFI and gold loan portfolios, a diversification of which it plans to pursue gradually. Regarding its long-standing aspiration for a 'Universal Bank' license, Ujjivan SFB's management expresses optimism, citing a reduction in queries from the Reserve Bank of India, although no specific timeline has been provided.
