CreditAccess Grameen’s net profit plunged 88% year-on-year to Rs 47.2 crore in the fourth quarter of FY25, weighed down by a four-fold surge in impairment provisions on financial instruments amid sustained stress in the microfinance sector.
On a sequential basis, however, the country’s largest microfinance NBFC posted a turnaround from a net loss of Rs 99.52 crore in Q3FY25.
Interest income remained stable at Rs 1,354.25 crore during the quarter, compared to Rs 1,363.17 crore in Q4FY24. However, total expenses rose sharply by 46% to Rs 1,356.63 crore, primarily due to a significant spike in impairment provisions, which climbed to Rs 582.91 crore in Q4FY25 from Rs 139.79 crore a year ago.
The lender’s Portfolio at Risk (PAR 90)—loans overdue for over 90 days—rose to 3.3% as of Q4FY25 from less than 1% in the same quarter last year. In Karnataka, the company’s home state, PAR 90 doubled sequentially to 2.4% from Q3FY25.
“We have successfully reversed the trend in new PAR accretion across all states to near-normal levels, except Karnataka, which should take another two months to normalise,” said Udaya Kumar Hebbar, Managing Director, during the company’s Q4FY25 earnings call.
Disbursements declined 20% year-on-year to Rs 6,472 crore in Q4FY25. “Disbursement momentum was affected as we prioritised portfolio stability over guided growth,” Hebbar said.
The share of borrowers with more than three lenders in the gross loan portfolio reduced to 14.7% in Q4FY25 from 25.3% in August 2024. Similarly, the share of borrowers with unsecured indebtedness above Rs 2 lakh dropped to 10.8% from 19.1%.
The company’s gross loan portfolio declined 3% year-on-year to Rs 25,948 crore in FY25. “The revised FY25 growth guidance of 7-8%, issued in January 2025, was impacted by incremental stress emerging from Karnataka,” Hebbar said.
Hebbar also announced that he will step down as MD of the company on June 25, 2025 and the current CEO Ganesh Narayanan will take over MD with effect from June 26, 2025, subject to regulatory approvals.