CreditAccess Grameen Reports Rising Loan Stress and Decline in Collection Efficiency in Q2 FY25

CreditAccess Grameen Reports Rising Loan Stress and Decline in Collection Efficiency in Q2 FY25

BSE-listed microfinance lender CreditAccess Grameen Ltd has reported an increase in stress on its asset quality in the second quarter of FY25, ending September 2024, compared to the previous quarter. The lender’s portfolio at risk (PAR) for loans overdue by at least 30 days surged to 3.3% in Q2 FY25, up from 1.8% in Q1 FY25. Overdue loans in the 60-plus days category rose to 2.4% from 1.4% in the previous quarter, while the 90-plus days bucket saw an increase to 1.7%, up from 1.1%, according to the company's filing with the Bombay Stock Exchange (BSE).

The collection efficiency, including arrears, also declined, slipping to 96.2% in Q2 FY25 from 97.9% in Q1 FY25, reflecting challenges in recovering dues. In response to these pressures, CreditAccess Grameen’s stock closed 2.96% lower at ₹1,119.4 per share.

Loan disbursements for the company saw a decline of 11% quarter-on-quarter (Q-o-Q), falling from ₹4,476 crore in Q1 FY25 to ₹4,004 crore in Q2 FY25. On a year-on-year (Y-o-Y) basis, disbursements dropped by 19% from ₹4,966 crore in Q2 FY24.

The company’s assets under management (AUM) shrunk by 4% Q-o-Q to ₹25,133 crore in September 2024, down from ₹26,304 crore in the previous quarter. However, on a Y-o-Y basis, AUM grew by 12%, up from ₹22,248 crore, indicating long-term growth despite recent challenges.