Capri Global targeting 27% growth this fiscal: MD | Economic Times

Post Covid, this will perhaps be the first Diwali, where there will not be much restriction and we can see full-fledged demand coming up. We are gearing for that, says Rajesh Sharma, MD, Capri Global Capital. First quarter clearly has proven to be very challenging for the MFI industry. The asset quality has deteriorated. There have been lower collections, stalled disbursements. Are you seeing recovery kicking in and how long has the recovery started, since July onwards?Post July, the collection has improved. Coming to asset quality, a small percentage of requests for restructuring have come from the MSME segment. Barring that, most of the clients are still able to meet their requirement of July EMI because business has started. In August, we are seeing a healthy trend and the festive season is coming up. On the ground, our team is busy meeting their prospective clients’ requirements and going to the rural market, where our branches are to assess the situation. We feel that post Covid, this will perhaps be the first Diwali, where there will not be much restriction and we can see full-fledged demand coming up. So we are gearing for that. There should be good credit growth in the next three-four months as well as good asset quality. With the opening up of the economy and economic activity in markets, business should be back to normal. We are seeing a collection efficiency of about 90% which is a very good trend. We are quite optimistic and gearing up. Our disbursement also grows month after month. We are hopeful and excited that slowly we are coming out of the Covid situation as the vaccination drive is going up. What is your assessment on the credit demand on the back of resumption and the onset of festive season? Are things looking brighter as we move forward towards the festival season?Yes. So, good credit growth and demand in the MSME segment is coming up. Last one year, there was lesser activity and now people’s hope has come back. There is more confidence also with prospective MSME customers asking for more money. The existing customers are asking for top-up loans to meet their business requirements. We believe that we should see the good days again without lockdown obstacles. Even the rural market and semi-urban market in all spheres -- whether it is a smaller trading shop or a smaller manufacturing activity or a small restaurant -- across all the small businesses, activities are growing and that is reflected in their collection efficiency as well as the demand. Last month we were at nearly pre-Covid level of disbursement. In fact, we have added 400 more people on the ground and opened a few more branches to our existing geography where we are operating to look at this trend. In fact, after two years, we have added more people and more branches.Is this broad based or are there certain pockets that are still giving you a cause for worry? Skymet now says the rainfall is going to be below normal in all probability. Is that a cause for concern for you?We operate primarily in Maharashtra, Gujarat, Madhya Pradesh, Rajasthan and NCR region where we have 2,000 employees. About 1,000 employees are at the front end who are handling our customers on the ground. While we have seen that demand has come back and for most of our customers in the MSME segment, we are seeing demand coming back, be it a small restaurant, a small organisation run by women or a tailoring shop. We are seeing lots of activity and week after week, an improvement in demand. In the last 12 weeks, our disbursements have also been growing. We should be able to disburse the same amount of money which we used to disburse two years ago. In terms of growth, can you specifically talk about the numbers that you are going to hit or you expect to hit in this current financial year provided there are no headwinds?We are hoping that the third wave will be limited and there will be not much lockdown. We have already achieved Rs 150 crore disbursement last month and we hope that we will achieve a disbursement of Rs 250 crore on an average per month by the end of September. We are targeting the growth of about 25-27% in this financial year. Last year, despite all hurdles we achieved a growth of about 18% and this year we are targeting a larger base with 25% to 27% growth. So, while we are in the MSME segment, in the affordable housing segment, we are confident that with our distribution network and our physical branches in place, we will be able to achieve this kind of healthy growth.