Gurgaon-based microfinance company Satin Creditcare Network Ltd plans to hive off its growing micro, small and medium enterprise (MSME) lending business into a wholly owned subsidiary.
The company has applied with the Reserve Bank of India for a non-banking finance company licence for its SME lending business and expects to get the approval by March.
“MSME lending is growing. It currently has a loan book of around Rs 113 crore and we expect it to grow to Rs 150 crore by March. So, we are planning to have a wholly owned subsidiary,” said H.P. Singh, chairman and managing director of Satin Creditcare.
The MSME subsidiary is likely to be called Satin Finserv Ltd. Once the subsidiary becomes operational, it would be the third wholly owned business of Satin.
In 2017, the company incorporated a wholly owned housing finance subsidiary to provide loan under the affordable housing segment.
In November 2017, Sating Housing Finance Ltd received the licence of the National Housing Board and began operations in February 2018. For the second quarter of 2018-19, the asset under management of the housing finance business was Rs 26.5 crore.
The company also offers business correspondence services to financial institutions through another wholly owned subsidiary — Taraashna Services Limited.
On a consolidated basis, Satin had an asset under management of Rs 6,191.4 crore as on September 30, 2018. The company expects a year-on-year growth of 30 per cent in its asset under management in 2018-19 over the previous year.
Singh said the liquidity crisis in the non-banking finance space has not affected the microfinance firm in a major way.
“I think we have not faced any kind of pressure from our lenders. We have got Rs 1,200 crore which is lying in our books, we have got undrawn sanctions of about Rs 600 crore and we have got a pipeline of another Rs 500-600 crore. So, for us that pressure is absolutely not there,” Singh told analysts in a conference call.
Last month, the company has also launched a mobile application for loan products to provide quick access to small personal loans for the urban and semi-urban population.
Satin, however, does not have any immediate plan to become a small finance bank unlike many microfinance institutions who eventually aspire to become a bank.
“The idea is to grow as a differentiated financial services company,” Singh said.