MFI CreditAccess posts Rs 99.5 cr loss in Q3; provision burden rises

Microfinance lender CreditAccess Grameen Ltd posted a loss of Rs 99.5 crore in the quarter ended December 2024 (Q3FY25) due to a significant provision for stressed loans. It had reported a net profit of Rs 353.42 crore in the same quarter last financial year (Q3FY24).

 

Its net interest income (NII) increased by 7.4 per cent year-on-year (Y-o-Y) to Rs 861.7 crore in Q3FY25, compared to Rs 802.4 crore in Q3FY24. Its stock closed 6.07 per cent lower at Rs 913.9 per share on BSE.

 

The impairment provision for financial instruments rose to Rs 751.9 crore in Q3FY25, up from Rs 126.2 crore in Q3FY24.

 

The MFI, in a statement, said: "While early risk recognition, conservative provisioning, and accelerated write-offs resulted in a loss of Rs 99.5 crore in Q3FY25, it will safeguard our profitability over the coming quarters with growth rates normalising."

 

The assets under management (AUM) grew by 6.1 per cent Y-o-Y to Rs 24,810 crore from Rs 23,382 crore.

 

Udaya Kumar Hebbar, managing director of CreditAccess Grameen, said the third quarter was encouraging, marked by a sustained reversal in new delinquency accretion rates beginning mid-November 2024 and positive business momentum starting December 2024. "This trend of reversing delinquencies, robust customer additions, and sustained AUM growth further improved in January 2025," he added.

 

"We foresee 7-8 per cent loan portfolio growth for FY25. We anticipate asset quality to normalise by Q1FY26 and profitability to normalise by Q2FY26. Our preliminary outlook for FY26 suggests AUM growth of 18-20 per cent, driven by robust customer additions, improved customer retention, and a higher share of retail finance," the statement added.