September 27, 2025

Hold on tight, microfinance fans! Crisil Ratings just waved a positive magic wand on Muthoot Microfin’s long-term bank loans and non-convertible debentures. The rating outlook has jumped from 'stable' to 'positive,' while the solid A+ rating stays put. This move follows a same-step upgrade for Muthoot Fincorp, the big parent company of the Muthoot Pappachan group. But what’s cooking behind the scenes? Well, the microfinance lender's asset quality has been under pressure, but there’s a silver lining! Crisil spotted that since the fourth quarter of fiscal 2025, collection efficiency (that means how well they get their money back) has started to steady. In fact, collections for loans not overdue have been rock solid—over 99% during fiscal 2026! Plus, Muthoot Microfin isn’t taking risks lightly. They have covered 69% of their stressed accounts with provisions as of June 30, 2025. That’s like keeping a safety net ready for tough times! On the other hand, the gross non-performing assets (NPA) ratio stayed steady at 4.8% at the end of June, unchanged from March, though it was much lower at 2.3% back in March 2024. Meanwhile, the company’s assets under management (AUM) slightly slipped from Rs 12,357 crore in March to Rs 12,253 crore by June end. Not a big drop but still worth noting. To sum up, Crisil’s upgrade signals confidence in Muthoot Microfin’s improving health despite some hurdles. Who says a microfinance lender can’t sparkle amid challenges? With strong loan collections and prudent provisions, this company is ready to rock the credit world!

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Tags: Crisil ratings, Muthoot microfin, Microfinance, A+ rating, Asset quality, Loan collections,