ESAF Small Finance Bank is looking at a 25-30 per cent growth in FY24 from the expected bounce back of overall business with good traction on the assets and liability .
Paul Thomas, Managing Director, says the bank has reported a 23 per cent growth in FY23 with total business touching ₹30,996 crore, a deposit component of ₹14,665 crore and advances including under collection arrangement at ₹16,330 crore.
Read also: ESAF Bank’s Q4 net profit rises 144% to ₹106 crore
There has been an overall growth momentum after two years of the pandemic. Rise in assets, growth in revenue of micro enterprises and 125 new branches to reach 700, are some factors that have contributed to growth. The major loan segments that the bank is now focusing on are gold, MSMEs, affordable housing, agriculture, mobility and traditional micro loans, Thomas told businessline in an interaction.
With the revival of tourism, the bank helps customers engaged in small scale businesses at various tourist destinations. “We are also promoting responsible tourism by offering small loans for homestays to energise the local MSME ecosystem”.
In the initial stages, almost 100 per cent of the assets were micro loans. “Currently it is around 70 per cent, not because we have reduced such loans, but due to the significant growth in the other asset segments”, he said.
On NPAs
On the NPA position, the Managing Director said the rise was due to the Covid and repeated lockdowns. However, the bank supported customers through moratoriums and loan restructuring, among others. It has sold NPAs worth ₹1,075 crore to an asset reconstruction company.
Asked whether Kerala Government’s MSME focus helps the bank get business, Paul Thomas said “it is reflecting in our loan utilisation. Many new enterprises being launched are micro enterprises and most of them happen to be our customers”, he said adding that around 45 per cent of ESAF’s overall advances are from Kerala.
IPO
On the IPO, he said the bank is going ahead with the proposal and planning to re-file the DHRP shortly.
ESAF Bank, he said, is committed pursuing sustainable banking from the beginning which has gained significance due to climate change, a shared concern worldwide. Committed to being a best social bank, it has opened three outlets in Attapadi, the biggest tribal taluk in Kerala, which does not have even a single branch of any other new gen private bank. “We are planning a financial literacy programme there in association with NABARD to educate tribal population on the basics of banking”, he said.
The work in sustainable banking has not affected the business and profit momentum which is evident in CareEdge Ratings evaluation with the best in class rating for ESG practices, he added.