'We plan to disburse around ₹6,000 crore in H2'

Muthoot Microfin’s net profit fell over 50% year-on-year to ₹31 crore in the second quarter, as cautious lending led to lower interest income.

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CEO Sadaf Sayeed tells Narayanan V about the lender’s disbursement plans for the rest of the fiscal, the stress scenario in the microfinance space, and its asset diversification strategy. Excerpts:

Has the stress in the microfinance segment improved?

I believe the stress has peaked, and the sector is now on a recovery path. In our case, we have been seeing improvement since the last quarter. Our profit has jumped fivefold to ₹31 crore sequentially, while total income rose to ₹577 crore from ₹559 crore. On a sequential basis, it’s a complete turnaround. Our credit cost, which was as high as 9.4% in the previous financial year, dropped to 4.3% in Q1 and further reduced to 3.6% in the current quarter—below our guided range of 4—6%.All these indicate that the challenges in microfinance are now largely behind us. We are now focused on growth and improving asset quality.

Were your disbursements flat at ₹2,274 crore?