Fusion MicroFinance-Well Placed To Sustain Industry-Leading Profitability: ICICI Securities Initiates Coverage

ICICI Securities Report

Fusion Micro Finance Ltd. is a leading non banking financial company-micro finance institution with assets under management of Rs 80 billion (more than 50% compound annual growth rate FY17-22) and borrower base of 3 million (more than 30% CAGR), implying average outstanding per borrower of ~Rs 25,000 (one of the lowest in MFI space) as on Sep-22.

The management has built the organisation with-

1. diversified operations (presence in more than 18 states as on Sep-22),

2. calibrated growth led by new customer acquisition,

3. stable management team along with second line,

4. high weightage on corporate governance (always audited by Big 4s) and

5. conservative provision policy (100% provision for 90 plus days past due portfolio under IGAAP).

Pristine asset quality during Fusion Micro Finance's decade long journey, as reflected in gross non performing loan of 3.8% and standard restructured book of 0.5% as on Sep-22, highlights its quality underwriting, proactive risk management and deep understanding of demographics in states where it operates.

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