‘Credit on UPI is a game changer, will democratise access’

With the microfinance (MFI) stress cycle behind, Suryoday Small Finance Bank is shifting to individual underwriting and diversified retail and MSME products.

- BASKAR BABU, MD & CEO, SURYODAY SMALL FINANCE BANK

MD & CEO Baskar Babu tells Mahesh Nayak, that credit on UPI is emerging as a major growth catalyst for the bank, deepening customer relationships and driving scalable new-to-bank acquisition alongside a stable, retail-led deposit strategy. Excerpts:

Is the current geopolitical tension expected to impact the bank’s business, and if so, to what extent?

The impact of current geopolitical tensions on our business is expected to be limited and largely indirect. Our portfolio is predominantly domestic, granular, and retail-focused, with negligible exposure to global trade, commodities, or cross-border activity. Any influence we foresee would be second-order, primarily through higher global interest rates that could affect domestic funding costs, or inflationary pressures that may temporarily influence customer cash flows. Our operating model gives us resilience. Our focus on inclusive finance, secured retail lending, granular deposits, and strong individual-level underwriting, supported by ~95% CGFMU (credit guarantee fund for micro units) coverage, positions us well.

Is the microfinance crisis behind the industry and the banks?