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CreditAccess Grameen Ltd
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Good morning, ladies and gentlemen. Welcome to CreditAccess Grameen Q2 FY '22 Earnings Conference Call, hosted by IIFL Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Alpesh Mehta from IIFL Securities Limited. Thank you, and over to you, sir.
Thanks, Lisa, and good morning, everyone. Welcome to 2Q and 1H FY '22 conference -- earnings conference call of CreditAccess Grameen Limited. Today, we have with us Mr. Udaya Kumar Hebbar, Managing Director and CEO; Mr. S. Balakrishna Kamath, our CFO; and Nilesh, Vice President, Investor Relationship. Without much ado, I hand it over to Mr. Hebbar for the initial comments and post which we will do Q&A session. Thanks, and over to you, sir.
Thank you, Alpesh. Good morning to everyone. Many thanks to you for taking your time and joining us today to discuss our second quarter FY '22 financial performance. The second quarter saw positive trend on all fronts, as business momentum inches back to pre-COVID levels. The company crossed the INR 100 crore [indiscernible] administration mark, helping ease the challenges posed by COVID. After lockdowns gradually lifted in July, we quickly regained our focus on growth and expansion, maintaining pre-COVID with [indiscernible], acquiring new customers, engaging actively with our clients, leading to a healthy growth in that portfolio and improvement in asset quality. Our monthly disbursements have gained strong traction since July, consistently being over INR 2,100 crores every month at CA Grameen. As indicated earlier, given disbursement [indiscernible] have gained momentum starting October, crossing take INR 227 crores. At a consolidation level, we dispersed INR 5,262 crores from July to October '21 and acquired 2 lakh new products, [indiscernible] capital creation, significantly contributing to India's full growth story. For extensive engagement [indiscernible] plan in the seasonal as you saw collections [indiscernible] various consistently rise unlocking pace commenced. At CA Grameen, collection efficiency rose from 91% in July, to 93.3% in September and further to 94.3% in October. Considering 4.7% nonpaying customers, which effectively translates to close to 99% collection efficiency. Collection efficiency at MMFL, which constitutes 16% of consolidated GLP, gradually improved from 83% in July to 87% in October, with non-paying customer group second [indiscernible] GLP. At CA Grameen, the asset quality indicates -- that show indicators for positive signs as PAR 0 reduced from 30.6% in June to 99.9% in October. [indiscernible] reduced from 7.8% in June to 6.5% in October, back of the year predominantly weekly engagement and productive efforts on the collection front. At Madura, the PAR 0 saw an increase to 20% in October from 15.4% in June. However, we expect the [PAR to peak of] in November and then start gradually reduce over coming months. Historically, there has been some lag in MMFL traction process, which should improve now as already MMFL [indiscernible]. On a stand-alone basis, our Gross Loan portfolio grew by 21.5% Y-o-Y and 5.3% Q-o-Q to INR 1,184 crores in Q2 FY '22. While the borrower base declined by 1.5% to 27.5%, primarily due to write-off of 2 lakh borrowers in the last 12 months. MAA grew by 13.1% to INR 309.2 crores, while NIM stood at 11.3%. Adjusting for the impact of interest income direct condition and impact of maintaining higher liquidity on balance sheet, NIM would have been 12.5%. We have lowered the liquidity from 15% to around 9% as of September. We expect to further lower it to a normal level of 8% by Q3, which will further reduce the negative carry impact in [indiscernible], quite worried. The cost-to-income ratio was 42.5%, while OpEx GLP stood at 5.1%, higher on Y-o-Y basis primarily due to [indiscernible]. This should normalize by end of the year with expected portfolio growth during second half. The PPOP grew by 10.6% Y-o-Y to INR 188.2 crores. Credit cost was INR 91.1 crores, which also included the impact of write-off of INR 129.6 crores during the quarter. The PAT for the second quarter was INR 72 crores, leading to ROA of 2.2% and ROE of 7.8%. GNPA reduced from 8.12% in June '21 to 7.18% in [indiscernible] and PAR 90 was at 5.4%. Overall, ECL was 5.51%. On a consolidated basis, our gross loan portfolio was up 19.2% Y-o-Y to INR 13,333 crores and borrower base to 37.5 lakh, primarily due to a rate up of 3.29 lakh borrower during the last 12 months. NIM grew by 11.5% to INR 368.9 crores, PPOP grew by 11.1% to INR 218.7 crores. Credit cost was INR 19.9 crores. We have aligned the provisioning policy of Madura with CA Grameen, recognizing GNPA at 60 DPD, which led to an increase provisioning of INR 13.4 crores. Consolidated PAT was at INR 59.7 crores, resulting an ROA of 1.6% and ROE of 6.2%. We continue to maintain our focus on following into newer rural markets as a part of our geographical diversification strategy and tap the unserved and underserved markets. A total of 142 branches are opened during July to October, primarily across newer markets, in UP, Bihar, Jharkhand, Rajasthan and Gujarat. Our overall branch network now stands at 1566 as on October '21, with a portfolio of INR [indiscernible] crores. Our continuous [indiscernible] expansion has laid out well in the past and will continue to perform in [indiscernible]. The process integration at Madura has been completed, including the system integration and aligning the provisioning policy as discussed above. As indicated before, beginning from October '21, we shall [indiscernible] scale business at Madura, offering our bucket of financial products and services based on trade [indiscernible]. With the reduced severity of the pandemic situation and with the increasing vaccination throughout the country, we are confident of delivering strong business growth in the second half of FY '22 as well at coming years. Assuming that there are no further severe business disruption on account of COVID, we look forward to achieving consolidated loan portfolio growth of about -- growth of 17% to 19% and our consolidated credit cost for the year would be about 4.5% to 4.9%, [indiscernible] around 1.8% to 2% for FY '22. Our integrated platform along with Madura, underpinned by our rural focus customers had [indiscernible], strong liquidity, capital adequacy, highly experienced management team and strong balance sheet cases in the forefront to drive the growth in this industry. With a short update, I will be happy to open the forum for discussions.
[Operator Instructions] The first question is from the line of Chirag Sureka from DSP Mutual Fund.
My question is regarding the laggard states. There are some states, it's actually are pulling down your numbers overall in terms of collection efficiencies and [EPA], including Maharashtra, Andhra Pradesh, to some extent Tamil Nadu and Karnataka. Is there any positive trend that you're seeing in these cases? Or you're going to see this kind of continuing because of some reasons in those particular states, if you could give us some more information that would be useful. The second question that I have is in terms of the reduction in percentage of nonpaying customers has been very good indeed. It's come down quite well. Do you -- when you say nonpayment -- when you say full payment, is it for that month arrears? Or is it including even past arrears? These are my 2 questions, sir.
Vivek, the laggard state, I think the state what you listed, is only Maharashtra, is little low. Otherwise, all are either equal or more than the company's current collection, whether it is Tamilnadu, Karnataka or Kerala. All are doing better than the average. What -- where the Maharastra was little slow, even in the COVID 1, impact got quite high there. Even in March 31, our collection efficiency was only 90% there. So it was continuing for some time. I think, the residual delinquent account till we think the whole life cycle of that complete, I think there will be some delay in collections in this Maharastra bucket. Otherwise, all states are doing well. Because our total collection efficiency is 94.3%, if collection for the -- due for the month and collected for the month. When you say collection nonpaying customer, they are not paid for the last 4 weeks. But during the month, they are not paid. They would have paid in the previous months still. But if they are not paid in the last 4 weeks, we are considering them as nonpaying customers.
The next question is from the line of Shreepal Doshi from Equirus.
Sir, my question was with respect to restructuring. So while it is lower at 1.4% for the consol book. What is the nature of restructuring that we have given to our customers, like in terms of the moratorium or the EMI amount getting revised, what is the nature?
It's a combination of 2, 3 items. Total is, as we earlier also told, the restructuring would be a last resort where customer, if they have a limited cash flow, then we would do restructuring. If they have no cash flow, definitely we will not do restructuring. We will go through the [indiscernible] route and [indiscernible]. Even in the first year, we did just less than 1% restructuring and overall 1.4. It is the multiple ways. One is a little moratorium, up to a month, and reduce EMI and also probably would have given some additional fund for starting business. All 3 are combination in this restructuring book.
Got it. Second question was with respect to the average AUM on active borrowers. So I look at a standalone level that number has increased to almost [38,500] -- and it used to be close to [44,000] in FY '21. So just wanted to understand how are we placed in terms of the market wise exposure? What percentage of these customers will be below 35,000, would be in the bucket of 35,000 to 45,000 and will be above 45,000?
See, what's happening since last 1.5 years, we have not acquired many new customers because of the COVID, restrictions and the lower business growth. So our existing customers who have been with us are growing. For example, when we said 34,000 average, our more than previous customer was only 33% and today, it already moved to 48%. So when we have 48% of customers over 3 years. So there is the tendency of lending little more to them because they have been loyal with us and they have been paying them. As we add more and more new customers, this average will come down, probably -- is not coming down, but it will phase out, probably the speed of increase per GLP per custom will actually come down. So this is average [indiscernible] between last 2 years because of higher current [indiscernible] higher, what you call a long-term [indiscernible] high -- That is why you see this kind of little variation. So second part is, the customers, we have almost 3 lakh customers, we have written off where the average portfolio for customer is quite low, actually. So it's also contributed for increasing the average of standing, it's a onetime probably. As the business, -- you can [indiscernible] as we start acquiring more and more customers like what you see here in the last 4 months, we already acquired 2 lakh customers, so slowly, this will get eased out.
Got it. Sir, just one follow-up question there. As you said that now more than 4 years vintage customers have increased for us. So what is the ticket size? Are we comfortable to give to this more than 4 year vintage customers, like -- and what is our average exposure for bad customer base?
So we are comfortable giving up to INR 1 lakh also, INR 80,000 to INR 1 lakh. But we always go by the need-based funding, even though they are for more than 4 years, [indiscernible] we will provide. As you know, we got a limit and within that, they can draw based on their need. So while our leverage is not very high, still about maybe INR 55,000 to INR 60,000 for more than 3 years, but the limited up to INR 1 Lakh available for them.
[indiscernible] average number.
No. Actual loan limit is available up to INR 1 lakh for them. Average of churning for customers over 4 years is 54,000.
Okay, okay. So one last question is with respect to -- like you [indiscernible] that Maharashtra is lagging for us, which is also reflected in the numbers in terms of collection efficiency. What is the qualitative sense behind the delays in that state? Like what are the specific geographies, if we can highlight where we are seeing the issue.
Within Maharashtra -- see Maharashtra what happened, we need to see from wave 1 to here. Even before wave 1, we had a flood and impact in Maharashtra, which was issue between '19-'20, and then 2021, almost 5 months Maharashtra was under lockdown during COVID wave 1, which impacted the whole system and the economy, [indiscernible] economy there. Then again, I think Maharashtra was early to start again the COVID wave 2 impact. So this multiple impacted the a bit more actually, particularly in that bit of flooding districts like, Kolhapur, Sangli, Satara, Solapur and kind of [indiscernible] Ratnagiri. So those are the districts little higher than the other districts. Whereas the northern part, example, Jalgaon, Nagpur, Buldhana, those districts are doing well. So some of the chips -- the Maharashtra has a little difficulty. Probably they are all coming back to normalcy, but still probably our write-off book will be higher than compared to other shares in Maharashtra. So once we clean that book, we would see a normal behavior in this state also.
The next question is from the line of Akshay Ashok from Dalal & Broacha Stock Broking.
Yes, sir. So this write-off sitting, we continue [indiscernible] from Maharashtra because the collection efficiency there is somehow not improving. So you think that these write-offs what you're taking, there will be more incremental write-ups, at what for Maharashtra...
It's not specific to Maharashtra. As we said, our credit costs will go up to almost 4% to 4.1%, which means it is including write-off and [indiscernible] -- So we believe we have about 4.5% kind of customers who are nonpaying and are close to more than 90 days. significant of them would be a break off going forward. But significant coverage is all already there on that. I mean more than, almost 75% [indiscernible] coverage already there for those accounts. So we estimate that there will be an impact on our book because of the rate of what we have to take off for Maharashtra well as other states there, nonpaying customers who are more than 90 days. If you see in our presentation, we had 4.2% of our PAR 90 are nonpaying customers currently. So significant of them may go for it. At the same time, a significant portion of that is already provided.
Okay. And what about the tax issue that you had, -- We had a demand rate, tax demand? Has it been resolved? Or any update on that?
It's not yet resolved. As we pleaded to us, the court has stayed the process and directed the tax authority to come back with more clarifications. They have not yet submitted their reports, I mean, response still. So I think at this point of time, it is as we have stay. So we don't need to respond to that report currently. So similarly, even our tax rate [indiscernible] viewed that, and we also felt that there is need of any contingency for this demand.
The next question is from the line of Nidhesh Jain from Investec.
Can you talk about any changes in the -- I mean in collection trends, specifically Tamil Nadu, [indiscernible] been severe range. So are we seeing any changes in the collection pattern there?
No, get -- It's only 2 days. And it's raining, it is not flooding. There may be 1 or 2 delay. See, always, when a third situation unless it is what we call continued for a week or 15 kind of flooding, normally, this will not impact because we go back next week or even 1 more week time, they'll pay back. So it may be a delay for a couple of days. Normally, we don't get into any delinquent situation for me. For example, right at Ratnagiri we had almost 1 week of rain last 2 months back. We had delinquency of almost INR 25 crores to INR 30 crores for a couple of weeks and eventually, we recovered everything. So normally, the longer the impact, then there will be a delinquency. Otherwise, we don't feel this is an issue. And even if it's very insignificant.
Sure. Second is, can you talk about the customers that we acquired roughly to that customer in the last 7 months. So how much -- what percent of these customers are new to micro finance sector -- Any color in terms of the average ticket size of these customers that would be useful, sir?
Yes. So it's the last 4 months, we acquired 2 lakh customers and close to 48% of them are new to credit [indiscernible] 47% or 48% and the balance are with other end of it, average may be around INR 33 crores to INR 35 crores.
Sure. Then lastly, in terms of the new initiatives that we have talked about in our annual report, like looking at the customer from a household level, offering other [indiscernible] customers like payments and insurance. Any update on that, sir?
So all of these are -- some of them are thought case, some of them are pilot case. For example, the banking transaction at the central meeting, we have piloted working in 4-5 branches to see how it works. That customers can withdraw their bank balance at our central meetings which is going on. Similarly, [indiscernible] cash, the pilot is going on. Whereas we are in the thought process and the work in progress for, we'll say, secure product kind of an affordable homes or home improvement or secured assets actually through retail platform we are planning, which is under the work in progress, similarly insurance, particularly vehicle insurance or 2-wheeler insurance, we'll say again, work in progress. So these are the long-term plan. What we talked about is vision 2025. Obviously, we have to start working on, and the successful we'll be moving into our production.
Sure. And then lastly, in the retail finance book, there has been reduction in number of employees, number of loan officers, I think the book has also been coming down. So what is your strategy there?
Yes. See, there's -- we got an opportunity to rethink on our retail strategy because we don't have headroom to grow there at this point of time, as our investment in Madura has been treated as a nonqualified asset. So what we did is, we are reworking on the retail business to eventually make the frontage of secure book, whereas unsecured book will continue to be a [indiscernible] branches. So we are retaining our employees. We are working on secured products like bigger [indiscernible] secured by [indiscernible] assets, affordable and home improvement, maybe even given the gold loan in the city and in urban branches, which -- all these [RF branches] are in district headquarters. So we are also [indiscernible] whether we can do gold loan there. So more of a 2-wheeler and 3-wheeler -- commercial 3-wheeler. So these kind of products we are evaluating for the RF branches. Maybe once our [indiscernible] is completed, we will get good headroom for that, we can naturally scale our business there. So just a quite extensive work is going on to prepare for this kind of secured book building. Including -- we have been focusing only for capital customers. So we've secured the [indiscernible] would also go for our open market opportunities.
[Operator Instructions] The next question is from the line Chirag Sureka from DSP Mutual Fund.
What I want to know is -- just alluded to the previous question in terms of the loan size increasing, is inflation playing an important role there. In the sense, if I can correct humorously, is there a cow price inflation, which is there, where the price of livestock, et cetera, with the loans [indiscernible] , have they increased? And with that, has the earning power of the customer also increased.
Looks quite difficult to assess an exact reason for the increase. What we go by the limit increase by vintage. As customers take longer [indiscernible] , the credit line keeps increasing, within that they can draw their limit. As I said, the customer can actually draw INR 1 lakh. The average outstanding, can go to INR 1 lakh also. If customers want to -- everybody want to draw the maximum amount. But if you see the outstanding average is only 54,000. That means they are drawing based on the need of their project. So it could be business expansion, it could be cow price increasing also, potentially, we don't know really. It could be expansion of additional business, additional income seem they would create, probably they are running a grocery shop, maybe they want to add a tailoring shop or they want to add some eatery shop. So that's also potential. So they've done their need, and we have created a limit, within that they are drawing.
Okay, sir. But you would say that for that set of customers, you are confident about their cash flows, that's why the limit itself is higher.
Yes. Definitely. One is, cash flow is higher. Two is, our experience has been very good. They have been loyal with us for the last 4 years. So that is why we are allowing it. We have -- as customers grow more and more with us, we have a higher confidence on them. We have higher visibility of their cash flow and higher visibility about the ability to repay and strongly connected with us.
The next question is from the line of Renish Bhuva from ICICI Securities.
Congrats on a great set of numbers. Sir, just first question is on the -- again, on the ticket side. So for CAGL standalone, we are now close to INR 40,000 per customer. So sir, what is your thought on this? I mean, till what level you would be comfortable increasing this ticket price further on the CAGL standalone business?
If we see for last 5 years, our CAGR increase in the portfolio for customers is about 10.5%. So this is actually in line with that. Only this year it has changed because we are not able to acquire new clients for almost last 18, 19 months properly. So there's only [indiscernible], otherwise our portfolio growth for customer is within that [indiscernible], probably by end of next year, we will have the exact CAGR within the 10% growth only. It's only a bit of aberration for the year. Because new customer acquisition is low for last 18 months till July this year. Otherwise, we don't really change it. So that's quite a comfortable CAGR growth of GLP per customer.
Got it. So the thing is that, I mean, at what level you will be comfortable. Say, within a year it goes to 50,000, does this will bother you to bring it down? Or you will be still comfortable growing this ticket size at 10%.
See, if I am giving INR 50,000 or INR 60,000 average for a customer more than 3 years, 4 years, is still comfortable. So where this is going to change is, as we start acquiring more and more new customers, probably this will again come back to normal.
Got it, sir.
As I said, our customer with more than 3 has already reached almost 48% now, which was only 33% 2 years before. Because we have not added more and more new customer, business as usual, the slight change has happened.
Got it, sir. Got it. And sir, just last question on the industry side. So sir, so whenever we are entering data for any new customer acquisition, sort of what is the rejection rate now versus, let's say, a pre-COVID level? And is there any divergence trend you are witnessing due to COVID, whenever you are setting the [indiscernible] data.
Yes, the delinquency is higher and for existing customer when you do the [indiscernible], the delinquency comparatively at least 10% more than a normal. So there is one [indiscernible]. Two, your own customers, at least 50% to 20% of them are not -- still not ready to actually expand their business or invest in the business or borrow further because probably they're still in the hangover of one more wave of also, because the same set of customers impacted twice already. So they probably, they may be waiting and watching for some more time to get a stable situation, because if there is one more wave, exactly those set of customer get impact because the typical business will still impact. So we saw, that is why the growth, there is some variation in growth because of this also. So my sense, it will take a couple of months, stable growth momentum for these customers to get the confidence of expansions.
Got it. Got it. And then just -- sorry, just last question. So sir, I mean, let's say, even in last 18 months, apart from the known geographies like West Bengal, Maharashtra, Assam, is there any other state where you see a strength is building up, maybe after second wave or some observation apart from these 3 states?
No. Even Maharashtra, it's a typical COVID issue and prolonged wave 1 and 2. Otherwise, we don't see -- Maharashtra is a difficult stage definitely. We are quite confident about Maharashtra in any case. So we are not seeing any difficulties in any shape. Kerala had some difficulty initially, but Kerala also back to normalcy now. Even our collections have come back to normalcy there.
The next question is from the line of Sarvesh Gupta from Maximal Capital.
Sir, if you look at the billing collection efficiency, it has more or less stayed constant in the last 4 months, which is a bit sort of counterintuitive given that other segments of the economy have seen much larger rebound. So is it more because of the weakness in the rural economy and representing -- being more [indiscernible]. What are the reasons that are contributing to the stickiness in that collection efficiency number, which is hovering in the same range for the past 4 months?
Sarvesh, I think I would contradict with you because our nonpaying customers are about 4% to 4.5%, it is a residual of COVID wave 1 and wave 2 actually, together, it's not 1. So if I say 94.3%, collection efficiency, that means for the beginning -- for the month of October, what we bill and then recover, let me tell you. And if I have 4.2% nonpaying, which is more than 90 days, so if you add together, we are actually 98% to 99% collection actually. So I strongly believe that rural is being better in terms -- and then being unsecured book. These are doing better actually, it is improving also. There are a couple of states which are not doing better because of the some of the reasons I already explained. Otherwise, it's very good, actually. Comparatively, even the secured book in some place have been in the same way.
And when are you expecting things to normalize, assuming that there is no third COVID? When do you think that you will achieve a normalized month in terms of both disbursements as well as collections?
See, disbursement is normalized. We are disbursing more than INR 1100 crores every month in the last 4 months, and which is almost a pre-COVID level. Collections, as I said, we are 94.3% on-time collection on same month and 4.2% customers are completely delinquents and not paying, which is near to 98%, 99% because that's also a near normal. So both are near normal as of now. If there is no wave 3, I think which will only further improve from here onwards.
Understood. And any impact on the slowdown in the rural economy in terms of what we were expecting versus what we are achieving right now.
Not really. As I just before said, there may be some set of customers, may not be willing to invest right now because they may be still thinking that if there is one more wave, it will be hit to them, because those are the businesses which impacted twice already. So -- but for them, probably 15%, 20% of borrowers are not investing right now, not -- probably the reason to borrow also -- reason to invest also. So they should be confident, maybe another couple of months. If they are confident that there is no more one more wave, probably they will also start borrowing and investing. So to that extent, there is a large [indiscernible] in the expansion or a growth in this business.
The next question is from the line of Vibha Batra from FairConnect.
My question is on, if you have any plans to convert to a small finance bank, if yes, broadly at what date would you think of that conversion?
No, we always have the chance to convert, Vibha. Probably, we decided not to become a small finance bank. We would continue to stay as an NBFC and our focus will continue to be the rural low income households. So we would stay [indiscernible]
Okay. But don't you think that when you achieve larger scale, liquidity could be an issue. And I'm not talking about the normal scenario, especially the stress scenario, given the kind of understanding and also the confidence or lack of confidence, whatever way you want to put it, a lot of sales [indiscernible] that have, it could be quite sterssful to manage liquidity in prolonged stress events.
Yes, we have to definitely plan liquidity. That is why if you see in the last 6 to 8 years, we have been one of the company which diversified our liabilities beyond India, already about 14% of our liability is outside India, and we are working on to expand it to 25%, 30% in the next 2 years, which is quite possible. Similarly, within India also is diversified into a long term and short term between different type of institutions. It is one of the strength of Grameen in the last several years. And we are quite aware about the liability management because this is not just disbursement of [indiscernible]. So we are quite conscious about it, and we are confident of raising enough funds at low cost. Remaining to be low-cost lender in this segment, despite our banks are able to give a lower lend, but we are able to give much better pricing to our customers.
Okay, sure. But what would be your state of 2 or 3 rationales are not converting to a bank, not optic to convert for a bank?
It's a choice. We can become bank. But our view is that we have a large highway to grow in the rural space of India, which is potentially possible with remaining in [indiscernible]. And we already demonstrated their low-cost operation despite working deep in the rural. So -- and then we are able to give a reasonable return with that. So we don't feel a reason to go. Because the only reason probably liability, which we saw in the last 5 years, even many of them transformed into NBFC, but we have not seen the customers pricing has come down. Whereas we being the remaining industry, we are able to bring down the customer pricing, much beyond the NBFC or banks or [indiscernible].
The next question is from the line of Abhijeet Sakhare from Kotak Securities.
The first question is just to understand the [indiscernible] product. So we tend to have the -- we tend to give limits to the customers, which they can use on a flexible basis. So wanted to understand like generally, what has been the observation of using these limits especially by overdue customers. We allow that? And do we see overdue customers sort of drawing down on these limits in a more aggressive way during the COVID period?
No, Abhijeet. Actually, there's a rule there for drawing the money they have. They should be nondelinquent and the group should be nondelinquent, as well as they should be nondelinquent outside Grameen also. So those are definite. Secondly, the cash flow is reviewed before the [indiscernible]. And the group approval is taken before giving [indiscernible] . So there are lots of checks and balances. We are not seeing any aggressive borrowing from them.
Understood. So by delinquent, do you mean like 0 plus or 90 plus?
It's actually 0 [indiscernible] delinquency. Within us, we would review, for example, within 1 or 2 weeks of delay because of the COVID situation. Otherwise, normally even 0 [indiscernible] not tolerated.
Understood. So second one is in our core markets of Karnataka, Maharashtra and Tamil Nadu, what would be the share of customers where we would be the sole lender and some general distribution of the number of loans that you're seeing in your core markets?
We distributed [indiscernible]. So we have about 43% of our customers satisfied -- about 43% of our customers are unique for us, who are not borrowed from anybody. And again, another 45% of customers -- 42% of customers are having only 1 outside lender for our customers.
Thank you. The next question is from the line of Madhu Gupta from Quantum AMC.
I just have one question. This is regarding the harmonization guidelines [indiscernible] by year-end. Any update on that?
No, we don't have any update -- We are also waiting for the guidelines.
Thank you. The next question is from the line of Shreepal Doshi from Equirus Securities.
Just had a question with respect to the strategy. So we are seeing that some of our peers operating in MFI ecosystem, indicating their intention to enter into secured products, such as gold, MFI secure and affordable housing. And you also alluded, like we are also evaluating the debt aspect. So are we also looking at exploring those products? If you can just throw some light on this part, will be.
Shreepal, after MFI up to 15% of the products, we can actually build the long micro finance book. So which we are exploring to use this opportunity to build the secured book. That's the only reason where we are working on how to announce that the products which are secured, the potentially non-micro finance allowance for what we are getting.
Got it. So within that like we would be excluding gold and MFC secure sort of product.
Yes, yes. [indiscernible] Correct. You're right. So we are exploring, which is the best one. We will pilot and that will be expanded there.
The next question is from the line of V.P. Rajesh from Banyan Capital.
Just 2, 3 questions. First of all, the 15%, 20% customers that we said are a little hesitant in investing in their businesses. Is there a regional texture to that? Is it considered in one particular state? Or is this across various states where we are present.
This is actually now across the place where customers are not in the essential [indiscernible] who would get impacted if there is one more COVID comes because they have -- they got impacted. Some set of borrowers are already delinquent. Some of them struggled and paid back, but still they may not be borrowing again immediately unless they are quite sure that there is no one more wave. Because let say, assume the transportation sector, were in ecosystem of pilgrimages or tourism, they are there into a business of non-essential. So let us say the hairdressing salon or beauty parlor kind of thing. So probably they may not be investing and expanding their business currently. They struggled twice, so it is across geography, is there in that particular business, not the specific geography actually. If the geography tourism, probably, there's a higher number of customers, the geography has a pilgrimage center, the typical customers are higher. So basically, the business that we are in or ecosystem that we are in.
Right. And my next question is, you said 94% people are current on [indiscernible] . So should I assume that these 94% don't have any as well? Or how should one think about that?
Sorry. Can you just repeat?
Yes. You said 94% of the customers are at this month. So my question is that, how should one think about the past 10 years, if they are? And should we assume that they are all clear from their past deals as well? Or how should one -- how are you taking care of that look?
So 94% is the collection efficiency, 94.3%. I think stage 1 is about 91%, that less than 15% due. So maybe 2% odd will be basically between 15 days to 60 days past due on customers.
Which are paid in the current month, but they may still have some [indiscernible].
Yes. correct, correct, correct. So [indiscernible] a little bit in our presentation as you can see.
Yes. Okay. Understood. Understood. My last question is on the [indiscernible] after all, are you checking that the new customers or current customers who are coming for loans, are they vaccinated or not?
We don't check the vaccination status while lending to them, but we keep tracking the customer vaccination status. We have data, maybe [indiscernible] customer vaccination data? We keep tracking. We have some data probably, maybe you can reach out Nilesh, he will [indiscernible] later.
The next question is from the line of Renish Bhuva from ICICI Securities.
Sir, just one question on the competition, okay? So we have been hearing the lenders are prepared to the lend to smaller MFIs. So sir, what is the ground feedback you are getting in terms of the competition?
You're talking about the competition in micro finance lending, right?
Yes, yes. Yes.
Yes, we are yet to see any significant visibility on that, Renish, because there is not many are aggressively acquiring new customers. I do agree actually, but maybe different reasons, we don't know. Maybe this quarter, we should see probably once you see that where some of them, probably the PAR 30, PAR 0 quite higher also. So then obviously, for example, even in our case, if a branch has more than 10% delinquency, we are not allowing them to acquire clients. We say, you concentrate more on correction and stabilizing the branch. So obviously, 30% of branches, we are not allowing them to do fresh business right now, only renewals and collections. So obviously, see difficulty will be there for many of the lenders, so depends on geography. So I think this will shape properly, maybe next 1 to 2 quarters.
Right, right. But sir, I mean, let's say, even if you look at the industry subsegments like [SSBs] clearly not sort of willing to expand MFI book and they are incrementally focusing on the selling and non-MFI book, wherein the smaller [NBFIs], I'm sure they must be getting difficulty in getting funds. So ultimately, the new market is sort of open up for guys like us, or NBFC-MFI. So from that perspective, do you see, let's say, next couple of years would be far better for us versus like what we have seen in the last 5 years?
Obviously, I have been telling that the higher opportune for MFI, particularly focused on rural actually. The urban market definitely will be captured by -- they said these are kind of formal players. So we have -- let's say this not expanding, it's not the new trend. Last 5 years, if you see the CAGL, growth of customers is just 4% to 5%. So it's only portfolio growth happened. And then obviously, they're not moving to rural. So we have opportunity, we have particularly rural. So we see a large opportunity continuously for at least for next half decade.
Got it, sir. And sir, just last question from my side. I mean sort of repeating in nature. So sir, since we are operating or maybe we are having a customer history for a longer period of time, of course, you highlighted that we are exploring these 2, 3 new products. But in terms of the entire financial ecosystem for the rural customer, have we started thinking from that perspective, let's say, shifting away from a single product MFI company to a larger organization or would be conglomerate providing all financial need of the rural people?
See, if you see -- if you read our document what you highlighted in our annual report, which is -- we talked about Vision 2025, while our thought process is to support the entire family of the low-income households rather currently the loan product for the woman actually. So in that direction, we are operating. So for example, some of the things we are working, let's say, [indiscernible] or 2-wheeler insurance, or bank transaction at the center. So all these things are, I mean, directed to support the entire family requirement. Maybe tomorrow, education loan for the son or daughter of the family. Business loan for the family or investment opportunities. All these are being [indiscernible] so whichever is most important for the family and based on the -- we will work on the partnership. So the idea is to move towards supporting them. I mean, financial partner for the family is our goal action.
Got it. And sir, just a follow-up on that. So I mean, does it make sense for a company like us, what deep rural presence and such a wide branch network of around 1,400 branches to have a micro ATM or other enable payment services having at our branches ultimately these customers going to withdraw from somewhere. So why not giving that facility in our branches itself?
So look at the opportunities are much more actually, not just ATM. ATM is one of the definite opportunity. But having India moving towards more and more cashless, more and more online transactions. I don't know the ATM may be relevant or not in the next 5 years, 10 years' time. We don't know really. But definitely, they need an opportunity to invest. They need opportunity to withdraw cash, deposits cash, basically cash in, cash out, pay bills, pay mobile discharges. And all those things facilities to be available in the rural, it can be done in a Grameen Central Meeting election. So basically, we are looking at everything of the family can be done and the financial times of the family can be done in a[indiscernible] . So that is the kind of vision we have by 2025. Just somebody asked a question about the vaccination. Our customer vaccination status is about 75%.
Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to the management for the closing comments.
Thank you. Thank you, everyone, for spending time, and look forward for 30th engagement. I wish you all happy Deewali once again.
Thank you. Ladies and gentlemen, on behalf of IIFL Securities Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.