Background of Satin Creditcare Networks
Satin Creditcare Networks is a microfinance company.
It is expected to see a reduction in its cost of funds during the January-March quarter.
Reason for Expected Reduction in Cost of Funds
The improvement is linked to an upgrade in the company’s long-term debt ratings by the rating agency ICRA.
The rating was upgraded from ‘A-‘ to ‘A’ in December.
This upgrade is a result of improved profitability metrics.
Projected Decrease in Cost of Funds
The Chairman and Managing Director (CMD) HP Singh mentioned that the cost of funds may decrease by up to 20 basis points (bps).
If the reduction occurs, it might fall to 11.25 percent, with a maximum potential decrease to 11 percent.
In the previous quarter (October-December), the cost of funds ranged from 11.23 to 11.50 percent.
Passing on Benefits to Customers
HP Singh affirmed that the benefits of the reduced cost of funds will be passed on to end customers.
The company aims to fully transfer these benefits to customers, as long as their net interest margin (NIM) is protected.
Anticipation for Q4 FY 2023-24
HP Singh anticipates a significant growth in disbursements for the company in the fourth quarter of the fiscal year 2023-24.
The expected growth is in the range of 43-44 percent.
Performance in the Previous Quarter (October-December)
In the October-December quarter, the company’s cost of funds varied from 11.23 to 11.50 percent