Small Finance Banks' loan growth to lower to 25-27% in FY25: CRISIL Ratings

Small Finance Banks' (SFBs) loan growth will moderate to 25-27 per cent in FY25 against 28 per cent in FY24, a domestic rating agency said on Monday.

Crisil Ratings said though a tad lower, the advances growth will be robust and driven by factors like segmental and geographical expansion by the entities.

While capital buffers remain healthy, SFBs will face challenges in mobilising deposits and their costs and will explore alternative, non-deposit avenues to fund credit growth, the agency said.

The asset growth will be driven by traditional microlending being the most popular and new ones like mortgages, small businesses or even unsecured loans.

"Credit growth in new asset classes is seen at 40 per cent this fiscal, while that in traditional segments will be 20 per cent," its senior director Ajit Velonie said.

He added that the share of new asset classes will cross 40 per cent by the end of March 2025 on the back of the faster growth and underlined that most of the asset ...