Elevated stress in microfinance portfolio
Microfinance NPA remains high, with slippages of ₹255 crore in Q2, primarily from older vintages (2022-23) and concentrated in Tamil Nadu and Karnataka.
ESAFSFB / Q2-FY26 / risks
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ESAF Small Finance Bank · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
high
NIM compression from shift to secured lending
The strategic shift towards lower-yielding secured loans has reduced NIM to 5.9%, and further compression may occur if yields on secured products do not improve as expected.
Regional concentration in deposits
Kerala continues to be the largest deposit base, posing regional concentration risk despite efforts to diversify into other states.
Single large NBFC account slipping into SMA
A ₹40 crore NBFC exposure (Hela Infra) slipped into SMA1, and management's response was cautious, indicating potential for further deterioration.