Ease of doing business for MSMEs: Microfinance company Satin Creditcare Network on Monday announced the merger of its wholly owned subsidiaries – business correspondent services provider Taraashna Financial Services (TFSL) with MSME lender Satin Finserv Limited (SFL) “to capitalize on the underlying synergies and to develop capabilities that would make the combined entity stronger,” the company said.
“The assets and liabilities of TFSL, the transferor company, including its operations and capital are being transferred to SFL, leveraging gains in the operational metrics and will bring the assets under management (AUM) to Rs 764 crores and presence in 10 states through 175 branches for the company,” according to a company statement.
Incorporated in 2018 to lend to MSMEs in manufacturing, trading and services, SFL will now also engage in business correspondent activities with various banks and non-banking financial companies (NBFCs) after merging with TFSL.
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HP Singh, CMD, Satin Creditcare Network Limited, said, “Keeping in mind of future-proofing our business, it is definitely a step towards our long-standing vision to increase our operational efficiency through the consolidation of TFSL with SFL to create a combined entity that sources new businesses, while also offering customized products and solutions to our clients. We are certain that this merger will enable us to reap strategic benefits and have a positive impact on our margins by leveraging on the capital and infrastructure.”
Satin Creditcare Network currently has a presence in 23 states and union territories and around 90,000 villages. As of December 31, 2022, the company had 1,260 branches serving 27 lakh clients. It reported 35 per cent net profit growth in the third quarter ended December 31, 2022 to Rs 55 crore from Rs 41 crore during the year-ago period.
The AUM grew over 11 per cent to Rs 6,798 crore from Rs 6,123 crore during the said period on the back of more than 59 per cent year-on-year growth in disbursements to Rs 1,725 crore in the Q3 of the current fiscal. In terms of asset quality, the gross non-performing assets (GNPAs) stood at Rs 188 crore – 3.92 per cent of the on-book portfolio during Q3, improving from 8.61 per cent during Q3 FY22.
Notably, to boost lending to micro and small enterprises, the government’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which implements the credit guarantee scheme for micro and small enterprises (MSEs), had added microfinance institutions (MFIs) to the list of member lending institutions (MLIs) in lending to new enterprises with credit guarantee cover.
