Fusion Finance eyes Rs 200 cr recovery from stressed assets in 12 months

Fusion Finance plans Rs 200 crore recovery from stressed assets, redeploys staff for collections as NPAs ease and new customer share to rise by FY26

Microlender Fusion Finance Limited (FFL) is targeting recoveries of around ₹200 crore over the next 12 months from its ₹3,400 crore stressed assets book, which includes written-off loans and non-performing assets (NPAs).

 

“There is a book of about ₹400 crore in the 90-plus days overdue bucket, and another book of ₹3,000 crore, which is over 240 days overdue and has been written off. Out of the ₹3,400 crore, we have identified a portfolio of around ₹700 crore from which we are confident of recoveries,” Sanjay Garyali, chief executive officer of FFL, said in an interview with Business Standard.

 

“Even if we are able to recover just 30 per cent of this ₹700 crore portfolio, the potential recovery would be around ₹200 crore over the next 12 months,” Garyali added.

 

The lender has redeployed staff from various departments to focus on collections, with a dedicated team of 550 people working on recovery tasks. Additionally, some recovery work has been outsourced, he said.

 

Fusion’s gross non-performing assets (GNPA) surged from 5.46 per cent in June 2024 to 7.92 per cent in March 2025, before declining to 5.43 per cent in June.

 

According to Credit Rating Agency Icra, the significant deterioration in asset quality among non-banking financial company – micro finance institutions (NBFC-MFIs) in India pushed overall stress — including special mention accounts, NPAs, write-offs, etc. — to 15 per cent in March 2025, up from 5.9 per cent during the same period last year.

 

Calibrated growth in new customer business

 

“After focusing growth predominantly on existing customers, the listed NBFC-MFI now plans to gradually increase the share of new customers to 35 per cent by March 2026, from the current 24–25 per cent,” Garyali said.

 

The company had scaled down disbursements to new customers — from 46 per cent in March 2024 to 33 per cent in March 2025, and further to 24 per cent in June, according to analysis presentation for Q1Fy26.

 

Its assets under management (AUM) shrank by 37 per cent year-on-year to ₹7,687 crore in June 2025. MFI posted a loss of ₹92.25 crore in Q1FY26, following significant provisions for bad loans.