Ladies and gentlemen, good day and welcome to Satin Creditcare Network Limited Q3 and nine months FY2023 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. H.P. Singh, Chairman cum Managing Director of Satin Creditcare Network Limited. Thank you, and over to you, Mr. Singh.
Thank you. Good morning, everyone. Thank you all for taking the time to join us and discuss our financial results for Q3 and nine month ending FY 2023. I wish all of you a very happy new year and continued success now and in the years ahead. I hope that you would get a chance to go through our quarterly results and investor presentation. Those who have not seen them yet can access the same via our website at Satin Creditcare. It makes me happy to share with you that we have had a very good quarter, and looking at the business performance, it is fair to say that we are on a solid ground with growth and profitability back on track.
We witnessed significant improvement in our financial and operational performance, backed by sustained business momentum and consistent improvement in our asset quality, demonstrating deep commitment and tenacity of our people towards the desire for excellence. Before I move on to discuss the performance of the quarter, one thing which I would like to state is that whatever we have stated as guidance with all the stakeholders over the last seven quarters, our performance is in line with the guidance as stated. We have had a healthy disbursement for the quarter at INR 1,725 crores on a standalone basis, up by 59% year-on-year and 10% quarter-on-quarter, which was our highest quarterly disbursement in the last seven quarters.
We have started laying emphasis on acquiring new clients, and in Q3 FY23, first-time new clients accounted for 41% of standalone disbursements, up from 17% in Q3 FY22. Significant pick up in the disbursements led to a 11% year-on-year growth of AUM, which now stands at INR 6,798 crores on a standalone basis. The consolidated AUM stood at INR 7,945 crores. This growth is despite the write-ups done in nine months FY23. If we had not done the write-offs, the year-on-year growth would have been 20% on a standalone basis. With positive traction on the business side, we are poised to deliver around 15%-20% growth in this financial year, which is well within our guided range.
The most important aspect of our business now is the build-up of the new portfolio, which originated from July 2021 onwards. The performance is par excellence with PAR 1 at 0.6% and PAR 90 at 0.1% as on December 31, 2022. This portfolio quality of ours is way better than the industry standard as seen in the data by CARE Ratings. This is a testimony to our robust underwriting process and learning from the past mistakes. The share of this new portfolio in overall on-book MFI portfolio is 90% as on date. The on-book GNPA of the company stood at INR 188 crores, which is 3.92% of the on-book portfolio, down from 8.61% as on December 2021. Assam constitutes 65% of on-book GNPA at INR 122 crores.
Excluding Assam, GNPA as on December 2022 stood at 1.45%, and in value terms, coming at INR 65 crores. The company has sufficient on-book provisions amounting to INR 140 crores as on Q3 FY 2023, which is 2.9% of on-book AUM. During nine months FY 2023, collection against write-offs was INR 30 crores, which is till date the highest collection done by us. This is a result of our persistent efforts to collect back our bad loans even after write-off. The collection efficiency for Q3 FY 2023 stood at 100%. We are gradually scaling our cashless collection, which is INR 200 crores collected through digital mode in nine months FY 2023.
If we include cash drop as part of cashless, the total share of cashless collection will be 26% versus industry at about 21%, which is the September 2022 figures. Let me update all of you about our restructured book as on Q3. This has now reduced from INR 1,151 crores, which is INR 1,151 crores as on September 2021 to INR 200 crores as on December 2022. In percentage terms, it has reduced from 21.4% to 4.2% of the on-book portfolio. This reduction in restructured book is a result of INR 588 crores of collections. We also have written off INR 363 crores from this book.
As on December 22, out of the restructured book of INR 200 crores now, 50% of the book amounting to INR 99 crores is 0 DPD. We have created provisions of INR 82 crores on this book, thereby ending the pain of the restructured book. Coming to our Assam portfolio, we are optimistic of a turnaround in this geography and have dispersed loans amounting INR 159 crores during nine months FY 2023. The delinquencies in this book have been negligible, with PAR 1 at only 0.07% as on 31st December 2022. The on-book AUM stood at INR 270 crores, which is 5.6% of the total on-book AUM. To give you an update on AMFIRS, Category one and two have been successfully completed. The groundwork for Category three borrowers, the sampling of data by CARE Ratings has started.
The company is well capitalized with a CRAR of 27%, up from 22.6% in Q1 FY23, and a balance sheet liquidity of INR 1,300 crore as on Q3 FY23. Within the quarter, the company received the second tranche of INR 25 crore against the conversion of fully convertible loans from FlorinTree Ventures LLP. This investment sends a very positive signal and provides comfort to all our stakeholders. With this core capital, we are well-posed to have a comfortable capital position. The managerial and leadership skills of the management team at Satin have earned us another feather in our cap.
I'm happy to share that with all of you that Satin has been recognized as a top 50 company with Great Managers 2022 out of 500 companies at the Great Manager Awards, a platform that recognizes great managers and companies that nurture great managers. At Satin, we reiterate our commitment to sustainability of the environment in support of our communities through our various initiatives and the efforts of our committed workforce. Our clean energy program continues to attract participants and recognition while benefiting our customers. The core objectives of our CSR activities are fostering women's empowerment and encouraging education among the nation's youth, and gives me immense pleasure to share that we have been awarded by the Indian Social Impact Award for Best Education Support Initiative of the Year 2022-23, solidifying our resolve to cater to community needs.
We have constantly grown by placing a strong emphasis on customer service over the years. The cornerstones of Satin are technology-integrated processes, robust underwriting, domain expertise, agile workforce, and forward-thinking leadership. We are confident of continuing the growth momentum with better cost efficiency while maintaining the asset quality. Let me give you the financial institution highlights of our company. Starting with the saturated operational highlights. Our AUM as of 31st December stood at INR 7,945 crores. We have a customer base of 27 lakh as of 31st December 2022. Our disbursements for the quarter stood at INR 1,880 crores as compared to INR 1,348 crores in Q3 FY 2022. Our client portfolio stood at INR 1,985 crores.
As of 31st December 2022, 100% of our disbursement is made through cashless mode while cashless collections stood at 6%. We have also adopted debt side payment option and UPI auto debit. Standalone operational highlights are, our standalone disbursements for the quarter stood at INR 1,735 crore as compared to INR 1,085 crore in Q3 FY22. We observed a strong growth momentum in the disbursement as a result of cautious and calibrated approach taken time to time. Average ticket size of our MSME lending for this quarter stood at INR 43,000. Talking about our collection efficiency, the trends are as follows: Q1 FY23, 97%, Q2 FY23, 100%, Q3 FY23, 100%. The collection efficiency of Q1 FY23, Q2 and Q3 FY23 is excluding the restructured portfolio.
The collection efficiency on restructured portfolio for Q3 FY23 stood at 79.2%. We have a well-diversified customer base, a well-penetrated branch network of six and 77% regional exposure. On-book GNPA reduced from 8.61% as of Q3 FY22 to 3.90% as of Q3 FY23, to reach 452% to INR 188 crores, out of which INR 122 crores pertains to Assam. Our restructured book now stands at INR 200 crores, which is approximately 4.2% of the on-book AUM. As of 31st December 2022, our total branch network count stood at 1,260 branches, which is spread across 401 districts. We have a total state and UT count of 23, which makes us a well-diversified pan-India microfinance player.
As of 31st December 2022, 96% of our districts have less than 1% of portfolio exposure. We have seen a significant reduction in our portfolio risk in terms of exposure to top core state, which contributes 55% in Q3 FY23 versus 77.3% in FY22. Our well-thought-out diversification strategy has enabled us to sail through difficult situations and capitalize on our idea of enriching our client life through financing of various products. We have dispersed around INR 35 crore during nine months FY23 under the product finance category, which includes loans for bicycles, solar products, home appliances and consumer durables. An update on the subsidy. Business correspondent services under Taraashna Financial Services has an AUM of INR 563 crore.
As of December 31, 2022, the company operates through 157 branches and has more than 3.2 lakh active loan clients. Satin Finserv Limited, our SFL arm, has an AUM of INR 200 crore with three consecutive profitable years, CRAR of 54.3% and gearing of 0.9x. Total network stands at INR 101 crore. Sorry. Satin Housing Finance Limited has now reached an AUM of INR 383 crore, including DA of INR 36 crore. Having a presence across four states with 4,586 customers. SSSL has a 100% retail book. The company has 18 asset lenders, including National Housing Bank, CRAR of 58.4% and gearing of 1.9x. Total network stands at INR 122 crore.
The quality of portfolio remains intact with GNPA of 0.5% as on December 2022. To update you on amalgamation of the two wholly-owned subsidiaries, Taraashna Financial Services Limited and Satin Finserv Limited, second motion application was filed with the Honorable NCLT on May 25, 2022. The said joint motion application was admitted by Honorable NCLT in its hearing dated July 8, 2022, and issued necessary direction of serving notices and newspaper advertisements. The company had served the notices to government authorities and completed publication in reputed newspaper as per order. The Honorable NCLT in its hearing dated January 2, 2023, has reserved the order for second motion application. The pronunciation of order is awaited. Lastly, as we are treading on the path of growth, we are prepared to the road of more profitability and cost efficiency.
With this, I would like to open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions assemble. Participants, you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. The first question is from the line of Rajiv Mehta from YES Securities. Please go ahead.
Yeah, sir. Hi. Congratulations on a very healthy set of numbers. Sir, it's good to see that we are actively addressing the delinquencies and flows from the old portfolio and at the same time, the delinquencies from the new portfolio are minimal. The credit cost picture seems to be clear, if not that it's gonna go down from here on. My question is on the income growth, because in the last few quarters, you know, this income growth has been coming from off-balance sheet funding and off-balance sheet direct assignments. The income growth from the on-balance sheet portfolio growth and on-balance sheet funding availability, how should one look at it in the coming quarters?
Would the direct assignment remain a significant part on a continuous basis or when we will move the portfolio more towards on-book basis the availability of on-book funding?
Rajiv, you know, if you look at the past history and suppose the pandemic, you know, there was a complete dry down in terms of the assignments, you know. It dropped down to levels, you know, where nobody was actually doing, you know, assignments across over there. Once the matrix for credit disbursements has started picking up, you know, the lenders have started coming back again in terms of how we are looking at DSN. This is one of the products which is available from majorly public sector banks, you know. In terms of what we look at is when we actually during the last stages when the pandemic was about to happen, you know, our off-balance sheet and reassignments was close to about 25%-30%. You know?
We are reaching that level, you know, and we will probably be within that range bound, you know, in terms of how we look at it across over there. You know, for us, you know, I think, you know, as this probably comes to a place where we are in the range bound analysis of about 25%-30%, we will remain across over there. Once that comes up, you know, which we are now closer to, that across over there, I think, you know, the on-book portfolio will also start increasing across over there. You know, you have to probably look at from that broader perspective, that this is also a product which is available and a lot of lenders actually try to do this in terms of getting asset pools in their books across over there.
Mm-hmm.
my sense is, you know, we are probably looking at a regime post the pandemic was as comparable to what the previous, was before the pandemic, about 25%-30%, and that will remain, you know.
Sir, can you comment on on-balance sheet funding availability? Because you spoke about 15%-20% growth for the current year, and we are at 10% growth currently at the end of Q3. We need to grow at a much rapid pace from here on. Also looking into FY 2024, I mean, is on-balance sheet funding also coming through in the required amount as you would want to grow our on-balance sheet portfolio?
It is there. You know, Rajiv, you know, as I have reiterated so many times is that, you know, the Q4 is always a very big quarter, you know, for in the entire year as such, you know, and we are poised to have that same kind of, you know, growth pattern when we look at the last quarter which happened across over there and we're well on course on. We had guided for a 15%-20%. We are on course to do that. We have done 11%. I think, you know, we'll be you know, within our guided range of, you know, 15%-20%. On book raising of, I think, you know, money is not a problem at all.
I said, you know, it's only a few public sector banks which look at this product, mainly in terms of how the funding is done. That is, you know, how it probably moves around in the complete MFI sector itself. You know, raising funds for on-book, and the availability is a lot across over there. We have a very big basket. If you look at our lenders, you know, the basket contains of about 65-70 lenders which are there. No problem in terms of raising funds for on-book portfolio.
Sir, how should we look at your FY 2024, you know, profitability metrics, ROE? Currently, you know, we have high credit costs and we have high direct assignment income. When we go into FY 2024, when, you know, the levels normalize for direct assignment, you know, the levels normalize for credit costs, and when you have growth coming back, what could be the sustainable ROE level that you would look to in FY 2024?
I think overall, you know, I'm not giving you a guidance. The ranges which I'm talking about, we are looking at a 20% growth. That is one. We are looking at ROE about three. We are reaching there only basically. We are looking at a credit cost of about 1.5%-2% on a stable basis across over there. Whatever pain had to happen, you know, is probably now on its last stages of finishing off. You know, this is how, you know, the overall matrix looks like, you know. Growth, profitability, credit cost, I think, you know, this is where things stand across over there.
Got it, sir. Thank you, and best of luck.
Thank you so much, Rajiv.
Thank you. Participants, remember star and one to ask the question. Next question is from the line of Rana Sanghavi, retail investor. Please go ahead.
Hi, good morning. Good morning, sir.
Morning, Rana.
Congratulations on a good set of numbers. A few questions with, I see that, you know, we have seen that our customer acquisition has been broadly flat. And we have 27 lakhs of customers as of now. Can you help me as to which, what proportion will be repeat customers, which will be in multiple cycles and, what proportion will be new to credit, which we'll be having?
Rana, if you look at our presentation, you know, we've clearly mentioned that the L1 customers now are 41%, you know, as compared to our earlier reports. It's been a gradual process of post the pandemic, once things are stabilized to acquire or start acquiring new customers. Our test is flattish basically because earlier for the last couple of years, we were just concentrating only on our repeat customers across the board. Now, with now L1 customers, you know, probably coming to the forefront and we are also, you know, going forward, I think, you know, this probably will be addressed. Now we'll have, you know, we will have a start, rise in terms of the numbers of clients which we address.
Sure. Thank you. One question was on the gross yield. This quarter, the gross yield has been very high at 22.8%. What is generally the reason or is this a sustainable gross yield which we are looking at? What will be the sustainable gross yield targeted for FY24?
You know, the yields are marginally improving. One, that the portfolio quality is improving. Earlier there used to be some yield loss because of high overdue. As the overdue are coming back on track, the yield is going up. In many case, you know, the lending rates have also gone up, corresponding. There's a little bit of increase in cost of funding. Cost of funding has not increased as much as the yields have improved. You know, it is there. We can surely look at the yields are being at close to about 9.5%, 10% of yields in the business.
Okay. Okay. Thank you. Do you think that we have taken a credit cost of around?
Rana, your voice is breaking.
Am I audible now?
We can hear you, but your voice is not very clear. It's breaking.
sorry about it. Let me try again. We have provided a credit cost of 49-
Rana, we can't hear you. You know, it's all breaking up.
Okay. I'll dial back in.
Yeah. Thank you. Participants, you may press star one to ask a question. Next question is on the line of Uday Pai from Investec. Please go ahead. The line for the participant dropped. We move to the next participant. Next question is from the line of Varun Ghiya from Dimensional Securities. Please go ahead.
Hello. I have just two questions. One is the provisions increase during the quarter. Is it an area of concern? Secondly, what were the slippages during the quarter?
Provisions, you can see.
No, you are saying the entire credit cost, no?
Yeah. INR 65 crore. Yeah.
Yeah. This is our endeavor to clean the book. As you say, we are coming, like what sir had said in the beginning of the call, we are cleaning the books, the legacy portfolio we are cleaning. It's a part of that. It's not a point of concern because the 90% portfolio we have already told that it is already impeccably clean and good asset quality.
If you see the slide on restructured portfolio, we have written off close to about INR 25 crore out of the restructured book, et cetera. We are cleaning up the books simultaneously so that there's no paying left out, because we are broadly GNPA, about 65%, 70% of the GNPA are only from the Punjab. you know, we are cleaning up the book simultaneously. 90% of the book is clean and balanced. Most of it is from the Punjab, wherever there's a little bit of stress left out.
Okay. What were the slippages during the quarter?
Around INR 85 crores all in total, but then there are whatever write off, they are after that.
Okay. Understood. Thank you.
Thank you.
Thank you. Participants, you may press star and one to ask a question. The next question is on the line of Uday Pai from Investec. Please go ahead.
Yes. What is the interest rate that you are offering on microfinance currently? The second question is, what is the growth outlook on microfinance?
Sorry if I can, you know, not very clearly audible, but if you're talking about the interest rate which we are charging from the borrowers.
Yes, yes.
It's about 24%.
24%. What will be the growth outlook for microfinance and competition from others?
Our guided range is close to about 20%.
20%. Do you see the competition increasing at... Can you give a brief flavor of competition and how it is affecting you or something like that?
I don't know if you've read the latest reports which are coming in. The MFI sector is going to be close to about INR 12 lakh crores. You know, right now it's about INR 3 lakh crores. You know, that is where the growth and the demand stands like, you know, in today's volume. Competition all the more, all the more feasible. You know, if you have more competition, you can try to set up your own.
Okay, thank you.
Thank you.
Thank you. A reminder to the participants, zero plus star and one to ask a question. Next question is from the line of Rishikesh from RoboCapital. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, I have only one question. This quarter, our operating expenses are lower compared to last year and also last quarter. Is this like a sustainable level of OpEx here going to see? What can be the OpEx going ahead? Please can you guide on the same?
We are constantly trying quarter by quarter to bring our OpEx down, and this has probably yielded results actually, as you can see, this quarter. Our endeavor is as the portfolio in terms of when we look at recovery, we've got separate recovery teams, you know. Oh, sorry, that's not the right word to use. You know, separate teams which are looking at write off and actual as such, you know. As we said, you know, we've had the highest ever, you know, in these nine months where we've been able to get about 30 quarters. Once this starts taking the back seat across over there, I think, you know, we'll have more operating efficiency coming up. Acquisition of more customers, center size as we are trying to increase.
Once things stabilize, I think, the operating efficiencies will also start kicking in. We are looking at maybe a sub six, somewhere where we are able to bring it down. We're right now at about 6.68. Our endeavor in the next few quarters is also to bring it down to about six.
Good cost efficiency and the basic mix will help us have a desirable OpEx number.
Okay. Okay. Thank you very much, sir.
Thank you.
Thank you. The next question is from the line of Suraj Navandar from Sampradaya Investments. Please go ahead.
Hello, sir. Good morning.
Good morning.
I think quality on the news hopefully has been interpreted. Is it questionable at this level, sir, where do you see the asset quality, 12 months or 24 months down the line?
See, you know, this is, I won't say early days as yet, you know, but I think, you know, what we built up in the last, how it's been, it's gone for about 1.5 years now. My sense is that it might, you know, probably be in the same range it is. Definitely, yes, you know, when I talk about that we've got a 90+ NP of about 0.1%, you know. We will not say that it'll probably be continuing forever. Definitely, yes, the way we are looking at our underwriting process, the way we have actually...
This is what, you know, we've remained flat for the last few years as such, just to make sure that our trade quality does not suffer when we actually get into the mode where growth starts taking place. That is now being shown, you know. It's sustainable? Yes, definitely yes, you know. That's why I said, you know, my guided range is that, you know, we would have a trade cost on a stable year at about 1.5%-2%. Internally, our team has taken a much, you know, better target than that, you know, but that's internal for us, you know. This is the overall thing, you know, which we're trying to guide everybody that, you know, it will be in this range form across.
How do you see your loan mix changing going forward? Are you focusing more on housing loans or MSME loans or are loan mix predominantly driven by microfinance?
No. We work in separate subsidiaries, you know, which do their independent business of MSME financing and housing finance. They are growing at their own pace, you know, across. If we, if we say that, you know, they're growing at about 50%, 60% year on year, and they will continue to do that. They are separate from the microfinance funding company as such.
Okay. Sir, what was the cost-to-income ratio for this quarter?
47%.
Forty-seven?
Yeah.
Okay. Sir, any plans to open new branches?
Well, that happens across, you know, in terms of our operations across. We normally open about 50 to 20 branches, quarter by quarter.
We opened 22 branches this quarter too. There are very high branch opening options other than where we want to slightly deep dive more.
That's why I said, you know, about 50-20 branches quarter-on-quarter. That's what we plan to open.
Okay. The cost-income ratio will remain in this range, with new branch openings, or it will go up?
It won't go up. You know, 50, 20 on a, on a, on a denominator of about 1,000 branches, you know, I think it's hardly anything, you know, so it doesn't affect the cost-income.
Okay. Okay. No problem. Thank you, sir. All the best.
Thank you so much.
Thank you. A reminder to all the participants, you may press one to ask a question. Next question is from the line of Rahul Mishra, Individual Investor. Please go ahead.
Yes, thanks for taking my question. Just on this guided credit cost of 1.5%-2% on steady state, would you say that steady state has now begun? I'm saying this on a full boat so, you know, not differentiating between pre July, post July, apart. Do you think that's a couple of quarters away?
When I say steady state means. You know, if I tell you right now, I don't think I'll be doing justice to my statement. When I say steady state, it does start from the steady state of terms of affairs, both in collection as well as disbursement. Steady state starts from FY 2024. It happened from 1st of April. You know, if I tell you a steady state, the way growth, the way disbursement, the way collection, and the way I said, you know, the new disbursements which are taking place, you know. That's why the guidance I've said is 1.5% to 2%. Internally, our target is much better than that, you know. This is what the steady state over here talks about.
This would be the whole book, everything included from July fourth?
Yes, the whole book. Exactly. Exactly.
Oh, this is the-
The plan is an outlier and if we get, you know, category three, will that be an outlier in terms of whenever that happens in the process? We are confident it might happen before we end this quarter.
Got it. Very well. Thank you.
Thank you.
Thank you. Next question is from the line of Himanshu from Edelweiss Asset Management. Please go ahead.
Hi, sir. Thanks for the opportunity. Just one question. Probably I just joined the call little late, so probably you would have already answered here.
Your voice is not clear. May I request you to speak through the handset?
Hello.
Can you hear me?
Yeah. Just one question at my end. Probably you would have joined the call little later, you would have already answered probably. I'm sorry for that.
No, no, worry.
Repeating question. If you can give me, basically you have already given the post-July numbers you have already given in terms of the PAR 01 to 90 DPD. Can I get the similar trends for the 10% of the portfolio which is prior to July 2021? How is the nature of this basically in terms of the forward flows in the 0 to 90 DPD?
See, Himanshu, you know, I think, you know, we haven't done that analysis. Just to give you a brief briefing, out of this, you know, 10%, about INR 200 crores is the restructured book, you know. That is there, you know.
That trend is shared.
That trend is shared basically because in that, you know, we've got about INR 100 crores which is 0 DPD. The rest probably, you know, I don't have a bifurcation of 1 to 90 and 90 plus, you know.
Around, 78 is in PAR 90 and that's what we shared that.
Yeah. 78 is par 90, we've got a provision of about INR 82 crores over there. The balance is now I think about INR 200-300 crores, which is probably the balance which is left out of our own book of about INR 4,000 crores.
INR 4,000.
The balance is about INR 200 crores. You know, you can do the analysis and add those. The pain probably, you know, of even the 10% book which is there is in terms of, you know, the more stressful for us restructured book, and that is where the numbers stand.
Just secondly, so probably if you look at these numbers, probably can you give me some color around it in terms of the collection efficiency? Collection efficiency of the restructured you've already stated is 79. On the overall, actually the 100% probably of this remaining portfolio of 10% which is outside the restructure but still the prior to the July, can we get the collection efficiency numbers please?
Himanshu, on 96% of the book the collection efficiency is 100%. On 4% of the book which is restructured, the collection efficiency 79.2%.
Okay. Okay.
It is all inclusive. Even the other book which is pre July 21 but not restructured, the performance is not that bad. Another way to look at it is when we say our on book GNPA is near INR 65-66 crores during the time, that includes the whole of the book. That is another way to look at it.
Yes. Yes. My last question is around the disbursements. You've already given couple of guidance in terms of the ROE, CE, GM growth. If you can give me around what sort of a disbursement trend that you should, we should target for you, that you guys are targeting for the next year that we should track, what sort of a disbursement and how probably which states that you are very comfortable in terms of, lending and probably once they are few and which states where you are still cautious on growth?
See, I think overall what we're looking at is, when I said a 15%-20% growth for the next year means that average it will probably come out to about INR 600 crore-INR 650 crore month-on-month basis. That is what the disbursement plan looks like. A 20% growth is what we are targeting, and this year also it'll be 20%, you know. In terms of geography, I think, you know, we are probably looking at each and everything. We don't want to open up any more geography as such newly because I think, you know, we've covered 23 states. We don't want to now get into maybe any other state, but have a deep diving into whichever state we're probably working in.
For us, you know, UP, Bihar, you know, I think, you know, are our main states, you know, and we will continue to have a deep dive into those states as such, you know. I think overall it's normal as such, you know. There's no cautious stand to be taken anywhere, you know. I just gave you an indicator in terms of my speech, you know, I think maybe you were not there. But at Tamweeb, the growth now and our the new portfolio over there, the NPAs,
PAR part is 0.06.
Yeah, 0.06. Yeah.
Okay, sure. Can I lastly, can you give the some credit quality color of the non-MFI portfolio?
We have given for both the companies.
Both are actually given, you know.
0.5 for the housing company and around four point something for HSN.
GNPA.
GNPA and net NPA around two. We've shared on their respective slides, Vinesh. Happy to guide you through that again.
Okay. Okay. I will take a look.
Yeah.
Thanks. Thank you. Thank you very much.
Thank you. The next question is from the line of Darshit Shah from Anthink Wise Wealth Management. Please.
Yeah. Thanks for the opportunity. My question is around the employee count. When we look at the FY 22 employee count, it's come off substantially as on today. When I look at the employee cost, the cost for nine months FY 22 and nine months FY 23, there's not much difference in the cost. If you could help us understand this. When you say that you are doing a growth target of 20% for the next year, would we see a substantial increase in the employee cost as well as the employee count? Thank you.
I think if you look at the yearly this thing, I think you'll have to look at, you know, five, you know, the growth in terms of, you know, how the increments and appraisals happen as well. That's also one of the factors which you have to take into account. It doesn't remain a steady state, you know, in terms of whenever we have a drop in terms of employees. Also, you know, we are taking maybe slightly experienced guys when we are looking at a write-off collections to be done. You know, these are not employees, you know, who would as we do it in the loan officer category, where we employ them as, technically, graduates or maybe twelfth standard pass, you know. Our loan officers are based on that, you know.
That is where probably, you know, you might look at maybe the slight difference in terms of that. The second question was for you in terms of loan growth.
Yeah. When we say that we're gonna do a 20% loan growth next year, would this mean that, you know, the number of employees, specifically the loan officers, will change?
No. No. That, that won't happen. Our current optimum efficiency for every, you know, loan officer looking at borrowers is close to about 450 odd. In fact, you know, for us internally, we've set a benchmark that we would like to go to about 500 to 550. We will not have any practical rise in terms of our employee cost or personal cost based on that, because the optimum efficiency has started setting in post the pandemic when new clients are also getting acquired and we are deep diving into every branch in terms of increasing our number of loan clients per branch.
Thank you so much. That's helpful.
Thank you.
Thank you very much. As there are no further questions, I would now like to hand the conference over to Ms. Aditi Singh, Head Strategy, for closing comments.
Yeah. I just want to say thank you for to all of you for coming this morning and attending our call. I sincerely hope we have addressed all your queries. We tried to be thorough, share as much information, be transparent. If still you feel that you want to understand something more deeper or have a detailed discussion, you can always get in touch with me or my team. My name is Aditi Singh, I head Strategy. You can also get in touch with my colleague, Shweta Bansal, DGM - Investor Relations, and we shall be happy to take you through any details you want to understand. Thank you so much. Have a good day.
Thank you.
Thank you very much. On behalf of Satin Creditcare Network Limited, that concludes this con. Thank you for joining us. You may now disconnect your lines. Thank you.