Ujjivan to offer personal loans, two-wheeler loans

Ujjivan Small Finance Bank is all set to begin two-wheeler financing and personal loans as it looks grow loan portfolio by 30% in FY19, Managing Director Samit Ghosh said.
The new format bank will offer personal loans to teachers and nurses and people who do not have easy access to bank credit, while it will offer two-wheeler loans to its existing micro loan borrowers.

"Last year, we were pre-occupied in addressing the challenges posed by demonetisation. There is no baggage this year and we would now like to take off," Ghosh told ET.

The bank is also looking to grow housing loans and small and medium enterprises loans aggressively.

“Housing and SME loan businesses have been in incubation for a long time. They are ought to grow now,” Ghosh said.

The bank's loan book grew 18.5% year-on-year to Rs 7,560 crore as the bank has overcome the challenges post demonetisation. Its net interest margin grew to 11.6% in fourth quarter from 8.6% in the year ago period. NIM was 11.8% for the third quarter in FY18.

"We wanted to close the year in black. It's a great achievement under challenging business environment," Ghosh said.

Ujjivan Financial Services, the holding firm for the bank, reported Rs 65 crore net profit in fourth quarter ending March which was over three times of the net profit of Rs 19 crore in the year ago period.

The firm reported annual profit of Rs 7 crore, against Rs 208 crore in the preceding fiscal.

The impact of demonetisation, farm loan waiver by several state governments including Uttar Pradesh, have derailed repayment collection for small banks and micro lenders.

Ujjivan said its loan disbursed after January 2017 which constitutes 86% of total loan books saw 99.6% repayment. Its gross non-performing assets ratio improved to 3.6% at the end of March against 4.2% a quarter back.

The bank added about 7.6 lakh new borrowers in FY18. Its deposit base grew to Rs 3,772 crore.