Faced with high group lending defaults, SFBs move towards individuals

Small finance banks have been relying heavily on group lending so long

With a majority of small finance banks already operational, a challenging start has already forced a number of them to tweak lending strategies.

Due to demonetisation, coupled with rumours of debt waiver, the delinquency rates for micro-lending has shot up as high as 10 per cent, against about one to two per cent prior to demonetisation.

Hence, to bypass the risk associated with group lending, several small finance banks are looking to quickly migrate to secure individual lending, mostly to non-agriculture sectors.

"We are planning to diversify our portfolio to minimise the risk associated with group lending. As a bank,