Thank you, Shruti. Good evening, everyone.

We welcome you to the earnings conference call of CreditAccess Grameen to discuss the Q1 FY27 performance of the company. Today, we have the management of the company represented by Mr.

Ganesh Narayanan, MD and CEO, Mr. Gururaj Rao, COO, Mr.

Nilesh Dalvi, CFO, and Mr. Sahib Sharma, Head Investor Relations.

Thank you to the CreditAccess management for giving us the opportunity to host this call. I would now like to hand over the call to Mr.

Ganesh Narayanan for his opening remarks, post which we can open the forum for question and answer. Over to you, sir.

Thank you, Shreepal. A very good evening and welcome to the conference call to discuss our Q1 FY27 business performance.

I'm pleased to share that Q1 FY27 has been one of our strongest Q1 in the history of the company marked by robust portfolio growth, normalized asset quality, and profitability levels that reflect the underlying strength and resilience of our franchise. Let me begin with the operational highlights.

Our AUM grew 16.4% year-on-year and 2.5% quarter-on-quarter to ₹30,319 crore despite 6.3% TTM write-off and typical seasonal softness that Q1 brings. Disbursements for the quarter stood at ₹6,107 crore, up 11.9% year-on-year.

We added 2.5 lakh new borrowers during the quarter of which 35% were new to credit, and we expect this run rate to improve further, adding close to an average of 1 lakh borrowers per month going forward. This should be the primary driver of our MFI growth trajectory through the remainder of the year.

At the same time, digital collections including other modes have risen to 24.2% of total collections in Q1 FY27, up from 16.3% in the last financial year. We continue to see the scale-up of our retail finance book which now constitutes 20.6% of the AUM, up 250 basis points sequentially from 18.1 in Q4 FY26.

The growth reflects the deliberate graduation of high-quality vintage customers into the retail finance fold. Our distinct retail customer model built on long vintage, credit-tested and strong underwriting foundations is central to this direction, and we will be speaking to this in more detail shortly.

On the operational front, we opened 42 new branches during the quarter, taking our total network to 2,276 branches, a growth of 7.7% year-on-year spread across 457 districts. Our employee base grew 3% year-on-year to 21,981, and importantly, employee attrition continued to moderate meaningfully, standing at 20.6% as of Q1 FY27 against 25.8% in Q1 FY26.

The quality of our portfolio remains one of the best in the industry with the AUM share of unique group lending borrowers where portfolio quality has historically been relatively better at 45.7% and the AUM share of borrowers with over three lenders at 2.6% as of June 2026-end, reflecting the continued success of our deleveraging efforts and adherence to MFIN guardrails. Our customer app, Grameen Pragathi, continues to see strong traction.

We onboarded 4 lakh customers on the app during Q1 FY27 alone, taking our overall active base to 15.4 lakh customers and 34.5% of our total borrower base. Over time, as the customer adoption of Pragathi increases, we expect Grameen Pragathi to evolve into an anchor for instant loan eligibility checks, small-ticket loan availment, lead generation for new customers and retail products, and a unified cashless collection ecosystem.

We see this as a structural shift in how our customers choose to engage with us. Our net interest margin was robust at 14.4% at the end of Q1 FY27, driven by a combination of improving yields, lower interest reversals, and stable cost of borrowings.

Our cost-to-income ratio stood at 29.3% and PPOP grew 33.6% year-on-year to INR 873 crore. Turning to the asset quality, our PAR accretion trends remained well within the normalized range, contributing to a continued reduction in delinquency across all buckets.

Ex-bucket collection efficiency for June 2026 stood at 99.68. The average PAR 15 accretion rate for Q1 FY27 stood at 15 basis points per month, whereas the credit cost for the quarter stood at ₹212 crore or 0.72% on a non-annualized basis, comfortably within our guided range.

Gross NPA stood at 2.18%, net NPA at 0.76%, and PAR 90 at 1.46%, each showing sequential improvement. As a result, our Q1 FY27 PAT grew 720% year-on-year to ₹493 crore, resulting in an ROA of 5.9% and ROE of 24.4%.

On profitability, I want to spend a moment contextualizing our numbers appropriately. Our ability to demonstrate quick recovery helped us report strong improvement in our return ratios in Q4 FY26 and further in Q1 FY27, thus helping us to improve our trailing 12-month ROA to 4% and ROE to 16%, both aligned with our guided cross-cycle profitability metrics.

In view of this, as an encouraging start where credit cost behavior over the coming months will be the key determinant, we shall continue to monitor this closely and accordingly take a call on passing the pricing benefit to the customers in H2 FY27 in line with our board-approved pricing policy. On the balance sheet side, we continue to maintain ample liquidity with cash and cash equivalents of ₹3,536 crore, amounting to 10.4% of the total assets.

This is particularly important given the ongoing West Asia crisis. I want to clarify that to date, we have seen no discernable impact on our business from this development.

Our liquidity buffer along with undrawn funding lines of ₹2,993 crore and ₹9,440 crore of funding pipeline positions us well to navigate any external volatility, should it arise. Separately, on El Niño and its potential impact on rural cash flows, we have not witnessed any visible impact currently.

We will closely watch the underlying trends over the next two to three months before drawing any conclusions on how the situation may unfold. During the quarter, we also completed a private NCD issuance of ₹425 crore, which further diversifies our liability base and reduces our reliance on any single funding source.

Our overall funding profile remains healthy and foreign borrowings at 24% of our liability mix and capital position remaining strong where CRAR stood at 24.9%. I would also like to draw your attention to one metric that best captures our long-term performance.

Over the past six-plus years, involving four years of stress events, that is two years of COVID and two years of MFI credit cycle, the company's net worth increased from ₹2,734 crore in financial year '20 to INR 8,347 crore in Q1 FY27, compounding at 20% CAGR of which 86% increase came just through internal accruals. Very few NBFCs in the country have delivered this pace of balance sheet compounding.

It is the outcome of our consistently strong profitability, prudent capital allocation, and the ability to navigate changing business cycles while preserving financial strength. We have been witnessing structural shifts in our customers' profile, a trend described in greater detail on slide 26 of the investor presentation.

Today, our customers exhibit a significantly more diverse credit and income profile than in the past. A meaningful proportion of our borrower households already have retail credit exposure alongside their microfinance relationship, whether through business loans, gold loans, or through other secured products, and this diversification tends to increase with customer vintage.

The customers moving into this retail finance fold exhibit strong underlying characteristics. Just for understanding, our Unnati loan customers carry an average vintage of 7.7 years and an average credit score of 732, while customers availing mortgage loans show an average vintage of 6.2 years and an average credit score of 714.

These metrics reflect the depth of quality of relationships we built over time and validate the opportunity we see in graduating our microfinance customers into higher-ticket secured retail products. Unlocking this potential is a core pillar of our retail model and our life-cycle finance strategy.

This vision laid the foundation for our transformation journey called Project Shakti that embodies the strength, resilience, and aspirations of communities we proudly serve. We remain fully committed to our medium-term guidance of ₹50,000 crore AUM by calendar year 2028, confidence reinforced by the strength of the start we have made this quarter across borrower additions, asset quality, and margins.

As we move through the rest of the year and into the years beyond, we do so with confidence in our ability to compound this franchise responsibly and deliver sustained value to all our stakeholders. We will now open the forum for questions.

Thank you so much.

Hi, sir. Congrats on an extremely good set of numbers.

Hi, Ganesh.

Just two, three things. First, on the guidance part, right?

Do you foresee any risk to let's say current strong momentum, maybe due to El Niño, second-order impact of war, etc.? Hence, we are not changing guidance, or we might revisit in Q2?

See,

right now, we think everything looks positive. We don't see a reason why we should be taking into account some things that could develop at this point of time.

However, we remain with the guidance today as it is so that we watch one more quarter before we take any further step on the guidance.

Got it. Secondly, again on this a progress towards building a non-MFI book, right?

When we are reporting a 24% ROE in Q1, essentially which means our core MFI business is doing extremely well because most of your non-MFI businesses either will be incurring losses or maybe at very marginal profit at this point in time. Internally, what are the metrics you track to get a sense how long all these new products will drag on your P&L?

Is there any timeline in management's mind? For example, let's say mortgage, you guys are in the business for more than two years.

What could be that time frame wherein the new business should start generating steady-state ROEs or ROAs?

Right. See, most of the products are already profitable, including mortgage, if you don't consider our HO cost allocation.

It's still profitable. All products, like we discussed earlier, none of them are diluting our ROAs.

As a product line also, they have become profitable, except for two-wheeler, which is a small book at this point of time. Other than that, everything else is already in order.

Mortgage, we may need something like a 1,000 crore to reach a full-level breakeven, including HO allocation costs.

I'm sure the ROE will be much lower, right, in this product?

Nilesh, Nilesh here. Largely, all our lending rates are being published on our website product-wise.

You can see that the lending rates in all retail finance products, they are very much similar or in the individual business loans, it is maybe 50 bps higher than MFI because there we don't have the group mechanism. Even in the business loans backed by property, the average lending rate is around 20.5%.

It's around maybe 1% below MFI. Then the opex is much, much lower, the credit cost is much, much lower.

That's where today, if you keep aside the housing book, which is maybe only 1% of the total AUM, the balance 99% AUM is all at 20% plus

yields.

From that perspective, yeah, that's why you see that despite the MFI share dropping, the ROEs are not affected. Otherwise, if the MFI share is at 79%, if it has come down from say 90%, 100% to 79%, it still can't maintain the ROEs if the retail finance is not contributing.

It is very much apparent that retail finance is equally profitable. That's where overall, while the AUM mix is evolving, we still see the ROAs and ROEs are intact.

You see 91% of our book today is the graduated unsecured business loan book, so that is already significantly profitable like the group loans. Like Nilesh said, while the yield is lower, the credit costs are also much lower.

It is even much lower than your secured business loans.

Hence

none of them would kind of result in any overhang here.

Got it. Basically you are saying that at risk-adjusted level, most of these products are either at par with ideal profitability or maybe slightly better.

Okay. Just a last clarification on this Unnati and mortgage loan.

What percentage of the customer pool is existing to company and incrementally what is a sourcing mix between new-to-company and existing-to-company?

Unnati is 100% internal.

Okay.

Your mortgage is today 60-40.

55-45,

yeah.

So

55 is internal, 45 is external.

Okay. Incrementally also, this would be the trend?

Yes, in our assumptions, we've assumed 60-40, it should be range-bound anywhere between 55 to 60 internal customers.

Got it. The credit score which you publish on the mortgage piece, which is 700

plus,

this is at the book level?

Yes.

That's it from my side, sir. Thank you and best of luck, Ganesh and team.

Thank you, Renish.

Good evening, sir. Thank you for taking my questions

and

congratulations on a strong quarter. Sir, just firstly, clarification on the previous answers that you gave.

You said that maybe we'll want to wait for one more quarter before maybe re-looking at the FY27 performance guidance, but we can safely conclude that you're not seeing anything on the ground today with regards to either some weakness in monsoon or this

West Asia crisis? There's absolutely nothing on the ground.

There is absolutely nothing on the ground and also no leading indicators indicate any buildup of additional stress at this point in time.

Got it, sir. Then, sir, again a clarification in the previous question where you were just trying to explain that maybe the profitability metrics in retail finance maybe just works out to similar to maybe what a GLG offers on a risk-adjusted basis.

Even through a full credit cycle, do you think the credit cost and the operating economics in retail finance will compare with a traditional group loan business that we have?

If I look at the previous credit cycle that's went through, the retail products actually held much stronger ground, right? The PAR 30 in the Unnati book never crossed around 3%.

That was the max it touched even at the peak of the credit cycle. It's held ground through a credit cycle.

I'm saying even going forward because the profile of customers, which is associated both with vintage and our own knowledge of this customer base, and we are carefully choosing customers to graduate, and that should hold better than microfinance portfolio at all points of time is what we think.

Got it, sir. Then, sir, maybe the last question that I had is now that maybe we are in an upcycle again in microfinance, all of us are just trying to understand maybe whether this upcycle can be structurally better than the previous one.

We can clearly see that industry growth has started picking up again. Just trying to understand, are there any specific underwriting guardrails that we have put in place to ensure that maybe this upcycle is better than the past upcycles?

Any structural changes that you've done in customer selection?

See, we have a BRE, right? Because of the technology that we have, we on a continuous basis fine-tune our policy.

I could have different parameters for different states, different districts, different profile of customers, etc. That's something that we fine-tune on a continuous basis.

It may not be uniform across different geographies. That goes through revision probably on a quarterly basis depending on how you see a certain cohort of borrowers behave.

I think continuous improvement that we do on, you want to add?

Yeah. Abhijit, just want to add here that the two things are playing here.

One is the MFIN guardrail which is in place. That is continuous.

That is ensuring that customers are not overleveraged and they are within the guardrail. Internally, as Ganesh was telling, with the BRE in place now, we are able to control our credit policy at product level, at customer level, and at geography level.

It can be tuned very, very fast and applied. We do see this upcycle very, very structurally strong and it should continue that way.

Got it. That answers my question.

Maybe just one last question for Nilesh. I think this quarter when we look at credit cost, somewhere around 2.8, 2.9% on an annualized basis.

Should we now view this as a new normalized run rate or would you expect that credit cost, except for this El Niño and monsoons, credit costs to settle at these levels or somewhat higher level over the medium term as maybe growth accelerates, portfolio starts seasoning the book that we are originating today?

I think, Abhijit, hi, see, largely, I think the way we are shaping up the AUM profile. Directionally, we believe that microfinance, the credit cost should hold better because now the industry has rationalized to a good extent.

Today, the customer base is in a good shape. The leverage levels have come down.

The guardrails will ensure that this discipline kind of is maintained going forward. In addition to that, as we are kind of graduating our customers to individual loans or mortgage loans, there we see that our ability to control the customer behavior is better.

If you see over last 12 to 15 months, the share of our unique customers has gone up. Today, it's around 45%.

In our retail finance, it is higher. That is where overall we believe that the quality of the book will keep getting better as we are able to retain our high-vintage customers.

Historically we were losing our relatively higher-vintage customers, but now if you see in retail finance, the average customer vintage is almost seven years. That is something which will keep building up and it will help us to manage our overall credit cost going forward.

The current trend is still holding well, maybe around 15, 20 bps of new PAR 15 is what we have been seeing in the first four months. Obviously, there may be few hiccups here and there basis weather conditions, but largely we believe that the behavioral trend is holding up well on ground.

Got it. That answers all my questions.

Thank you very much and I wish you and your team [unclear].

Hi. Good evening, congratulations on very strong numbers.

See, just wanted to understand what kind of pricing reduction will have to happen in the second half if the current collection trends continue? Because I think there's a big disconnect between the ROE delivered in the first quarter and for the whole year guidance you've retained it.

Then what kind of pricing reduction will have to happen? Because broad calculation suggests that you may have to reduce pricing by 200, 250 basis points from October onwards, because then even that will have a partial impact on the whole year ROE because it's going to be only in the second half.

Maybe even that pricing reduction would only happen in the MFI book and not in the retail book. Would this be the correct understanding?

Right.

Pricing depends on a few components that we track on a 12-monthly basis, right? Any pricing would follow the pricing policy of the company.

In our thought process currently, by end of Q2, probably we'll look at a 50 basis points price cut if we are able to hold the asset quality as it is in Q2. Then,

Ganesh, what will then drag the ROE towards the full year average, right, if we are starting with such a high ROE number, and if only 50 bps of pricing reduction has to happen only from October, and that too may not happen on the retail finance book, it will only happen on the MFI book, then how should we look at your NIM guidance and the ROE guidance?

See, Rajiv, Nilesh here. Maybe I'll give you some perspective on how this will work.

Largely today on our borrowing cost, there is a decent visibility we have. Obviously, in this year, we'll be also focusing more on increasing our ECB loans, NCD loans, which come with longer tenors and they do help us on our ALM.

Obviously, the pricing is slightly higher, but overall, this transition will still have maybe 10, 15 bps of borrowing cost impact. That is something we had already briefed at start of the year that maybe we are starting the borrowing cost at 9.2%, it may end somewhere at 9.4%, average we may still hold around 9.3%.

Largely, borrowing cost is very much stable. Now the NIMs what we are generating, typically the NIMs will have a correlation to the credit cost trend what we are witnessing, because the operating cost is largely stable when you look at our performance.

Today, the 14% NIMs are kind of a reflective of the credit cost what we had over last 12 months. Even today if you see, our trailing 12-month credit cost is still more than 4%, it's around 4, 4.5%.

That's where today the NIMs are higher. In first quarter let's say our annualized credit cost is around 2.8, 2.9%, if this trend continues for maybe second quarter or third quarter, then the trailing 12-month credit cost will also drop below 4%, it may start trending closer to 3%.

If our credit cost settles around 3%, then 14% NIMs may not be required. Maybe we may even do a 4.5, 5-ish ROA with a 13, 13.5% NIMs.

The NIMs what we are generating, it has to be seen along with the credit cost what we are incurring to ensure that the final ROAs what we generate are in line with what we have guided for. Obviously, maybe currently what we are envisaging is if the current credit cost trend holds, then maybe in third quarter, we may have to pass on some benefit to the customers.

Otherwise, we will keep making 6% plus ROA. That is something which we would not want to obviously achieve on a continuous basis.

For couple of quarters, we may deliver a higher ROA because on a trailing 12-month basis, we have to recoup the profitability and ensure that our cross-cycle returns are in the range of 4.5 and ROEs are around 18, 20%. That is something which will be in back of our mind.

Obviously, even if we don't need a 200 bps pricing cut, as of now maybe we may have to take 50 bps pricing cut in third quarter, maybe another 50 bps in fourth quarter. It will happen gradually.

It will not happen at one shot. It will be purely linked to the credit cost trend.

If because of any reasons the credit cost stays elevated or if it again goes up, then we need not pass on the benefit as well. It is linked to how the credit cost trend is shaping up.

That leaves us with significant cushion to protect our ROAs and ROEs in the coming years. Currently, we are much, much comfortable on the guidance front.

Obviously, if we are able to repeat this performance over coming quarters, then obviously there will be a outperformance on the guidance. We will observe one more quarter and then we will take a call.

We do not see so much of pricing reduction to be undertaken. Even if we cut say 50 bps in Q3, 50 bps in Q4, for example, obviously the impact will be gradually felt.

Typically, it takes around 15 to 18 months for the assets to reprice. That leaves us with significant time to manage the overall profitability and be within the guided range.

Nilesh, even in the credit cost, right, this quarter it's annualized to 1.8%, but you still have write-off-related credit cost. When you go ahead, once the write-off

Now we don't have, but yeah.

No, you had, no? In this quarter, you had, no?

I'm just saying

now

if you look at the NPA level, it's going to recede further and hence the write-off-related credit cost will also come down. Your guidance is 3 to 4% credit cost.

How cushioned are we? I think there seems to be a good amount of cushion.

If you can measure or specify that cushion from a PAR accretion rate point of view, what have you budgeted in this 3 to 4%? Are you already assuming 25, 30 bps of monthly PAR accretion versus the current trend of 14, 15 basis points?

That if there is any event, it can be absorbed.

Yes. See, largely the write-off-related component will come down because the write-off what you have seen in the first quarter, this is primarily linked to the stress which came out in the previous

year's

second quarter. The improvement was very much visible from November last year.

That's where the second quarter whatever elevated stress levels they have come for write-off now. From second quarter onwards, we will have a normative write-off and that's where you will see the write-off impact on credit cost will come down.

When we gave a 3 to 4% credit cost guidance, obviously we had two factors in front of us. One is the West Asia crisis, and secondly, obviously we had to see how the monsoon is shaping up because there was a lot of news flow on how the monsoon is going to pan out in this year.

That's where we had kept this range. We have that as a cushion.

If everything goes well, we may continue to do what we have done in the first quarter. We have kept that cushion which we will, as we said, we will see one more quarter, and if we believe that we are not seeing any upside risks to the credit cost, then we may end towards the lower end of the credit cost guidance what we have given for the year.

Got it. Thank you and best of luck.

Thanks for the opportunity. On the PCR, our stage one PCR is around 1.6%.

How should we see the direction going forward on the stage one, stage two, stage three PCR? Because I think earlier we have guided that stage one PCR can go up to as high as 2%.

Right. Right now, we think the stage one PCR remains.

As we have an ECL committee now that sits every quarter to discuss on certain variables that are included in the model, including external events, including certain variables that we think that needs to be evaluated on a quarterly basis. For this quarter, it remains like this.

By end of next quarter, for example, if the West Asia crisis results in some additional fuel shortage, etc., then we can increase the weightage to that, and that is when it can go up. Otherwise, it's expected to be range-bound at this point of time.

Do I answer your question? I'm saying stage one will be 1.63%.

It is the same this quarter. Probably if nothing materially happens, next quarter also it could remain here till we get clarity on certain variables that are currently available.

Sure. ROA right now we are up around 6%.

We have guided for 4 to 5%. What is our comfortable ROA that we expect to deliver, especially during the upcycle, because the ROA should be higher, because when downcycle happens the ROA is much lower.

If you cap our ROA to let's say 4 to 5% during upcycle, then our through-cycle ROAs may be lower than what we have seen in the past.

Yeah. Nidhesh, as I said, we'll not be capping our ROAs.

Obviously, we do consider through the cycle ROAs. That's where even we said earlier that once we are out of a cycle for maybe couple of quarters, for two to three quarters, we will have a relatively higher ROAs which helps us to kind of regain the cross-cycle profitability.

Then obviously, the benefits get passed on to the customer. This year, like what we saw in FY24, we should see a strong profitability.

Then if the performance sustains for a relatively longer period of time, then obviously we have to realign and pass on the benefits to the customer.

Sure, but I think it is reasonable to expect that this year the ROE will be much higher than 4 to 5% bracket. If nothing happens on the West Asia war and El Niño.

Yes,

it's

correct. If it plays out like what has happened in first quarter, then yes, we should be relatively doing much, much better.

Yeah. Sure, thank you, that's it from my side.

Hello. Thanks for taking my questions and

hi, and

congratulations on the quarter. All this extra profitability that you're getting right now, basically you can use it in three ways, right?

One is by reducing yields and passing it on to the customer, which you have spoken about. The other two ways are probably to make some overlay provisions or maybe spend it on some kind of upgrade or adding branches or employees and all.

What about that part? Because you've got a lot of capacity, you haven't yet added branches and employees in the last few quarters.

Do you need to spend more, and what are the plans there? Any thoughts about making overlay provisions right now so that it can be used later on?

Right. With respect to branches and people and expansion, all of that as per the plan is budgeted, right?

You don't need additional budgeting for that. We've already considered that in the plan.

With respect to overlay, we already have given a overlay of ₹41 crore for the West Asia crisis. Say, for example, if at all something plays out in Q2 with respect to your weather, then probably there is some more overlay that is possible.

Like I said, because there is a committee now, there is a laid down process for even any variable that needs to go up, there needs to be backup data, there needs to be logic to build it. We follow Ind AS

and

that is a model we work on, right? We'll see how it goes.

Typically, today, Abhishek, there is a significant in-built overlay because as you see, our stage one provisioning is highest in the industry. It has been significantly raised over last three to four quarters.

One year back, our stage one was 1%. Today, it's sitting at 1.63%.

Plus the asset classification what we do, after 15 days we book it as stage two, after 60 days we book it as stage three. That allows us to kind of absorb the risk early and realign basis the prevalent risk trend.

From that perspective, we are well covered. That's how it is.

This yield increase of I think 60 bps Q-o-Q, this is all due to interest reversals?

Interest reversal does have a component in it. At the same time, obviously, the overall delinquency has reduced.

Your percentage of earning book has gone up. That also adds to the overall yield.

Now I think the yield will settle at this level. Then as and when in future whenever we pass on any benefit to the customers, it may trend lower.

As of now, I think it should settle at this level for some time.

Got it, okay. Thank you, those were my questions, and all the best.

Thank you.

Hi. This is Sonal Minhas.

I hope I'm audible.

Yes, Sonal, please go ahead.

Yeah. Thanks for taking my question and good set of numbers, sir.

Just wanted to understand some bit of subjective data that you can share on your individual loans. Is there anything to read on the PAR 30, PAR 60, PAR 90 numbers there which look kind of sticky or it's too early to comment on them basically as you see right now?

We have published this data in our investor presentation.

Yes, and they've been constant between last quarter and this quarter, so.

Yeah. Even here, it has been better compared to last quarter.

Nothing to read basically in terms of quality.

Nothing to read on asset quality. It's quite stable and strong.

Okay. The similar thing on slide eight on mortgage loans, is the book stable now given that we see PAR 30, 60, and 90 in the same range?

The book is stable now, but this is a very small base, right? As you start building, then you will start getting slightly range-bound credit cost increases.

It's mortgage, say each of them are around ₹270 crore as we speak. As we scale book, I'm just saying it is indicative at this point of time, but it should be range-bound.

We don't see any significant jump here, but this should do in similar ranges that we kind of hypothesize at this point of time.

Got it, sir. Just second question is the clarification.

You said that there is a guidance of reaching roughly ₹50,000 crore of AUM by the end of FY28. Is there a fund raise required for this or this is largely based on whatever we

Right. Right, one, the ₹50,000 crore AUM is something that we talked about as of calendar year, not financial year.

That is one. Second, for organic growth, we don't need capital.

The rate at which we're growing is something that we can augment using internal accruals.

Got it, sir. All right.

Thank you. Thanks for answering my questions.

Thank you.

Hi, sir. Congrats on a good set of numbers.

I just had a question which is on the relatively new products that we've ventured into, which is SBL, AHL, and two-wheeler. In that, apart from transitioning customers, our vintage customers from MFI, what are the other sourcing strategy that we have for acquiring new customers?

Right. This is completely sourced by our own employees.

We don't use DSA or connectors or any channel for sourcing. Right now, it is directly sourced by our employees.

It is also referred by our customers through our Pragathi app.

Okay. For all the three, or for two-wheeler we would be having any dealership network or even that product is more

Yes, we do have a dealership network, but that is more for fulfilling and not for sourcing. The sourcing happens through our branches, our own customers, right?

This is not offered to open market customers. We handpick customers who need a two-wheeler and are eligible as per internal criteria, and we take them to the dealer.

We don't have any presence in dealer locations.

Got it. Sir, as a strategy, how do we want to keep the book in the sense that would we want to have 60, 70% of the book being built through new sourcing or have the remaining coming in from the MFI customer, transitioning our MFI customers' credit needs?

Is there a thought process there or are we open to looking at it differently?

No, see broadly, like we said, all our products, barring mortgage today, are offered only to internal customers. All of it will come through internal customers there.

Mortgage alone we do both internal as well as open market. In our assumption, it should be around 60-40.

Right now we are around 55-45.

Okay. 60-40 meaning 60 internal and 40 60%,

yeah, 60% of the customers should be internal, that is group loan graduated customers, and probably 40% will be open market. When we do open market, we don't do low-ticket mortgages there.

We do less than ₹5 lakh only for our microfinance customers. For open market, we source with a minimum ticket size of ₹5 lakh and above.

Got it. Sir, just the last question, which is on industry side.

The last cycle wherein we had issues pertaining to customer leverage levels, which has broadly been resolved with the help of guardrails and also MFIs strictly following it right now. The other two issues were attrition at employee levels or RM levels and the third one was customer KYC-related issues.

Just wanted to get some sense on the latter two, which is on attrition as well as KYC-related issues. What have we done at a company level or at industry level to overcome these two problems?

Because these two were also instrumental in terms of the cycle that we just experienced.

Right. Attrition, I think, has to be managed at company level.

As an industry, we can impart training, so that is also something that MFIN does today. They offer certification courses to Kendra managers to either upskill them or to ensure code of conduct is implemented.

As a company level, we've managed attrition better than most players. As we closed the last year also with good numbers.

In fact, in Q1 we closed with attrition of 20.6%, probably one of the lowest. I think because we follow this policy of hire fresh and graduate them internally, we've been successful in managing this attrition-related issues with us.

I think that's something that kind of protects us. That even the last two years, we had a lot of employees rejoining us, roughly 2,500 employees expressed interest to join us.

We took around 700 employees back into CreditAccess. Typically during crisis periods, we are able to kind of retain them with us.

Also, in stress periods we ensure that the employees' variables don't get significantly impacted, right, because that is one reason why employees leave. Unless it is not a scenario created by the employees, if it is something like an industry-level stress, we kind of ensure that they are incentives are protected at a certain level so that there is continuous interest and effort going into the parameters that we want them to focus on.

With a combination of our people hiring strategy, internal promotion strategy with a differentiated culture and differentiated incentive structure, we've been able to kind of retain. Even the kind of incentives we pay, it is not too high on the variable side.

Variable side is quite low. We do both monthly incentives as well as annual bonus, there is focus for both short-term objectives and long-term objectives.

Far our people strategy has worked very well in our favor, and I think we'll continue to sharpen it as we move.

Got it. Sir, just a bit on the KYC front, because I think that was also

KYC, see KYC-related issue will continue to be there, but it is not so significant to speak of, right, because voter ID is the common thing that is used for microfinance because they're not allowed to do Aadhaar. A lot of us are working towards a combination of voter ID and PAN today.

We're also working on e-KYC. Somewhere between a combination of more than one ID, we should be able to kind of protect ourselves from any significant impact.

Even historically, while there is some amount, but I can't quantify it to say it's a large problem to kind of manage.

Got it, sir. Thank you so much for answering all my questions and good luck for the next quarter.

Thank you so much.

Thank you, Shreepal. Thank you, everybody, for your interest and support in the company.

We know we did a very good Q1 and we are hopefully continuing the same performance for the next few quarters and we're looking at a very strong year in this financial. Thank you so much.