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Annual Report 2024-2025

img Annual Report 2024-2025
Micro
Banking

Bridging Gaps,
Empowering Lives.

We remain anchored on the principles of inclusion and agility, striding confidently through the dynamic and evolving economic landscape of India. The MicroBanking segment, a core pillar of our business, is undergoing a calibrated transformation to suit the changing requirements of an aspiring population. By embracing secured lending, advancing digital empowerment and adopting customer-centric operating models, we are reshaping this segment into a resilient, future-ready portfolio – one that persistently serves as a catalyst for sustainable financial inclusion and growth.

The MicroBanking segment of Ujjivan remains a vital gateway to financial access for the under-served and low-income communities. We continue to prioritise portfolio quality, inclusive growth and risk diversification in recent years for better strategic realignment of the segment. A structural shift is underway, transitioning from traditional group-based loans to more individualised and secured lending products. With improving credit histories and financial progress among our customers, there is a noticeable shift towards Loan Against Property (LAP), Micro, Small and Medium Enterprises (MSME) loans and Home Improvement Loans. These tailored solutions are designed to meet the evolving needs of micro-entrepreneurs, enabling them to access larger credit pool. This shift is supported by a strong digital backbone and data-driven credit assessment tools, allowing us to better evaluate borrower profiles, particularly New-to-Credit (NTC) customers. At the same time, we are re-calibrating the pace of growth for the Group Loan segment, to prudently manage associated risks. This facilitates a natural shift from long-term group borrowers towards Individual Loans. Ujjivan’s ability to maintain better-than-peer repayment performance amidst economic uncertainty reflects the merit of our disciplined risk approach, high-touch customer engagement and focus on responsible lending.

Performance Dashboard

₹ 18,272 Crores

Gross Loan Book

12.2 % YoY

₹ 14,047 Crores

Disbursements

20.6 % YoY

₹ 2,312 Crores

Deposits

3.4 % YoY

4,630,532

Customer Base

96.6%

Collection Efficiency (1 EMI+OD)

( De-growth in FY 2024-25 over FY 2023-24)

Highlights of FY 2024-25

  • Initiated a strategic push to grow the secured individual loan portfolio (currently 5%) through Loan Against Property (LAP), Micro, Small and Medium Enterprises (MSME) loans and Home Improvement products
  • Enhanced credit decisioning for NTC customers using Business Rules Engine (BRE- based intelligence) and affordability assessments
  • Rolled out self-service loan applications via Hello Ujjivan, scaled WhatsApp banking and integrated AI models for faster, smarter loan disbursals
  • Enabled seamless progression for long-term Group Loan customers to higher-ticket Individual Loans, fostering deeper financial inclusion
  • Expanded digital repayment modes and deployed hyperlocal task forces in high-risk areas to preserve asset quality

Opportunity Landscape

India’s microfinance sector plays a pivotal role in driving financial inclusion, particularly for women, rural households and micro-entrepreneurs – segments that remain under-served by traditional banking systems.

Key trends shaping the opportunity landscape include:

  • Rising demand for customised, unsecured and secured business loans among Micro and Small Enterprises (MSE)
  • Increasing digital adoption, facilitating efficient customer onboarding, servicing and collections
  • Prevailing government support for rural credit expansion and formalisation of the informal sector through platforms like Open Network for Digital Commerce (ONDC)
  • Growing emphasis on credit inclusion for New-To-Credit (NTC) segments and under-served geographies

With these dynamics in play, the microfinance ecosystem presents a compelling growth opportunity for institutions like Ujjivan to offer differentiated financial solutions backed by technology, accessibility and trust.

Outlook

Looking ahead, Ujjivan’s MicroBanking strategy is firmly aligned with the trajectory of delivering profitable, inclusive and sustainable growth. We aim to deepen the focus on secured lending by significantly increasing the share of secured individual loans, while expanding our reach beyond traditional group loans. A sustained push will be in place to bolster risk-based lending frameworks and affordability assessments to maintain asset quality while scaling volumes. Digital growth will be central to this transformation, with enhancements planned across self-service digital journeys, AI-led credit decisioning and customer service via mobile platforms and vernacular chatbots. Simultaneously, we aim to widen our geographic footprint in under-penetrated rural and semi-urban regions through targeted branch rollouts and strategic Business Correspondent (BC) partnerships. A new suite of customised loan products for micro and small enterprises – supported by loyalty rewards and flexible repayment mechanisms, will be introduced to better serve the financial needs of this segment. Backed by a strong foundation of technology, strategic partnerships and an in-depth understanding of customer base, we remain committed to promote financial inclusion and unlock opportunities at grassroot level, while building a future-ready MicroBanking portfolio.

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