CREDITACCESS GRAMEEN LIMITED (NSE: CREDITACC) Q4 2025 Earnings Call dated May. 16, 2025
Corporate Participants:
Udaya Kumar Hebbar — Managing Director
Nilesh Dalvi — Chief Financial Officer
Ganesh Narayanan — Chief Executive Officer
Analysts:
Renish Bhuva — Analyst
Rajiv Mehta — Analyst
Shreya Shivani — Analyst
Shweta Daptardar — Analyst
Abhijit Tibrewal — Analyst
Nidhesh Jain — Analyst
Chinmay Nema — Analyst
Shreepal Doshi — Analyst
Viral Shah — Analyst
Ashlesh Sonje — Analyst
Hardik Shah — Analyst
Bhavesh Kanani — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day, and welcome to CreditAccess Grameen Limited Q4 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Renish from ICICI Securities. Thank you, and over to you, sir.
Renish Bhuva — Analyst
Yeah. Thank you, Sagar. Good evening, everyone, and welcome to Q4 FY ’25 earnings call. On behalf of ICICI Securities, I would like to thank Cred management team for giving us the opportunity to host this call. Today, we have with us the entire top management team of Credex represented by Mr Uday Kumar Habar, Managing Director; Mr Garresh Narayan, Chief Executive Officer; Mr Nilesh Dalvi, Chief Finance Officer; and Mr Saibh Sharma, DGM Investor Relations. I would like to hand over the call to Mr Uday Kumar for his opening remarks and then we’ll open the floor for Q&A. Over to you, sir.
Udaya Kumar Hebbar — Managing Director
Thank you. Thank you, Renesh. Good evening to all. We are pleased to welcome you to the conference call to discuss our 4th-quarter and FY ’25 business performance. This year has been transformative for the industry defined by the similar unfolding of diverse internal and external challenges. The industry has been tested by a complex set of challenges, including extreme, operational limitations due to prolonged elections, growing customer over leveraging, the ringent issues, tighter underwriting resulting in multiple guardrails and temporary disruption coming from the Karnataka audience targeting unregulated lending practices. The racing delinquency trend in the microfinance industry, which began in April ’24 peaked in November ’24, subsequently reversing till March ’25.
We are already witnessing new power accretion rate largely getting normalized across all states, excluding Karnataka, whereas we expect the new power accretion rate in Karnataka to normalize by end of Q1 FY ’26. Through every challenge, CIA has emerged stronger, proving the resilience and sustainability of the model that we have created. We witnessed the declining new power accretion rate across all state while elevated delinquencies in Karnataka during Q4 FY ’25.
In all states, the turnover story has been continuing since November second-half, driven by reduced leveraging, improved ground lever situation, high customer connectivity, expansion of our employee base, enabling more frequent and disciplined follow-ups. Combined with targeted support from our business support team, this strategy delivers stronger recovery outcomes across delinquent accounts.
We observed encouraging traction of collections from power buckets with 40% of our customers in par 1% to 60 and 10% of borrowers in par 60 plus making partial payments. As guided, we strengthened our employee from 19,33 in December ’24 to 20,970 by end of March ’25. Importantly, we maintained a firm grip on employee retention, achieving an annualized attrition rate of 30.5% in Q4 FY ’25 amid high churn across industry., the revised FY ’25 growth guidance of 7% to 8% issued in January ’25 was impacted by incremental stress emerging from Karnataka. This stress became visible from the last week of January 2025 because of operational ambiguities in anticipation of the ordinance, on-ground hostel environment, media and political sensitivities and collection being limited to central meetings. It is important to highlight the role of Yam Fin in serving as a unified voice of the microfinance sector in such a situation.
We proactively engage with the government of Karnataka, the RPA and the stakeholders demonstrating the sector’s commitment to strong governance, customer protection and regulatory compliance. Their leadership ensured that the audience focused on addressing unregular entities with minimal impact from the estimate cooperations of regular registrations. Despite these challenges, majority of borrowers continue to repay, reflecting underlying customer resilience.
However, disbursement momentum was affected as we prioritized our focus on portfolio stability over guided growth with disbursement rate dropping to 57% in February and 65% in March as a proportion to the normal rate. While these factors altered the Q4 FY ’25 growth plans, they were necessary to navigate the evolving environment and to protect our portfolio quality. As a result, our growth, credit cost and profitability parameters are not in-line with the revised guidance. We added 2.61 lakh borrowers in Q4 FY ’25, of which 43% were new to credit, resulting in FY ’25 newbor addition count at 7.49 lakhs.
The new to credit percentage trend has increased from 30% to 35% to 43% level over the past couple of quarters, demonstrating the underlying potential of the business across the country. As a result, our unique quarter-over has increased from 26.3% in I guess ’24 to 31.1% at the end of March ’25. We opened 100 branches during the year across well-established markets and newer geographies. Our evolve with customer strategy is helping deepen our customer engagement with retail finance reaching INR1,543 crores, contributing 5.9% of the AUM compared to 2.5% a year-ago.
Guardrails, coupled with our internal policies, including lender cap implemented in Karnataka from February ’25 itself, we have achieved significant deleveraging over the past seven months. The GLP of borrowers with more than three lenders declined from 25.3% in Nagash ’24 to 14.7% in March ’25. And the GLP of borrowers with over 2 lakh unsecured interest — indebtedness declined from 19.1% in August ’24 to 10.8% in March ’25. Further, the average total unsecured debt of CAGRM borrowers have declined 14% Y-o-Y, while average monthly obligations have declined by 10% Y-o-Y.
Now I’m referring to Slide 12. It is important to see Part 15 both at the company-level and excluding Karnataka. In case of borrowers with four lenders, Par 15 excluding Karnataka remained same at 11.7% Q-o-Q. Similarly, Par 15, in case of borrowers with more than four lenders, excluding Karnataka stood 29% in Q4 FY ’25 versus 26.1% in Q3 FY ’23. Out-of-the overall PAR15 of 6.6%, 41% of the account of borrowers with more than three lenders. Our accelerated write-outs initiated in Q3 FY ’25 alongside a prudent provisioning strategy has advanced have advanced the cleanup of test exposure within the book. We have taken INR479 crores accelerated write-off in FY ’25 of non-paying loans — loan accounts with INR180 plus DPD, resulting in additional credit cut of INR151 crores. The total write-off of FY ’25 stood at INR1,124 crores.
Overall, the company continued to hold bps or about to INR46 crore, higher provision over 9 370 bps or INR915 crores higher provision compared to IRAC Prudential norms and INR98 crores higher provision compared to NBFC provision norms. The credit cost stood at INR580 crores for Q4 FY ’25 and INR929 crore or 7.5% for FY ’25. The deviation in the credit cost compared to the revised guidance was primarily due to the Karnataka issue. Our collection efficiency excluding areas stood at 91.9% for Q4 FY ’25 being 92.4% for the month of March ’25. 190 plus stood at 3.28%, GNPA of 4.76% and NNPA at 1.73%, both predominantly measured at 60 plus DPD.
The net interest income grew 1.7% Q-o-Q to INR876 crores with portfolio yield at 20.4% and interest spread of 10.3%. Our average cost of borrowing has remained stable at 9.8% for the last seven quarters. In FY, in Q4 FY ’25, we raised INR3,144 crore, including USD50 million through the ECB route from International Finance Corporation. The share of foreign borrowings stood at 21% at the end of FY ’25, firmly moving towards the FY ’28 medium-term strategy of sourcing 25% to 30% of fund from foreign source.
NIM remained healthy at 12.7% for Q4 FY ’25, while 12.9% for FY ’25, in-line with our revised guidance. Cost-to-income ratio was at 31.9%, while PPOP stood at INR634 in Q4 FY ’25 to INR2,638 crores in FY ’25. Our accelerated write-off approach has certainly impacted Q4 FY ’25 profit, which stood at INR47 crores, though it will help safeguard our profitability going ahead. The liquidity levels, including cash-and-cash equivalents remain adequate at INR2,33 crore, amounting to 8.4% of total assets. Additionally, we have sanctioned in-hand of INR3,68 crores and another 4,61 crore were sanctions in pipeline.
The capital adequacy remained comfortable at 25.5%. Amid multiple headwinds faced in the FY ’25, we delivered ROA of 1.9% and ROA of 9.1%. For cross-cycle performance of ROA growth of 3.6% and percent and ROE of 14.4% over past eight years is a testament to disciplined execution and consistent value-creation. We are well-poised to 12 points for FY ’26 on the back of stabilizing asset quality and improving business momentum.
As we look-ahead, in FY ’26, we must carefully balance both asset quality normalization as well as business growth. With a more balanced competitive intensity in the industry supported by, we see good opportunity to leverage our strong balance sheet and capital position to drive business growth. Our retail finance division will prove to be a strong growth accelerator going-forward. However, we also need to be cognizant of various industry challenges in the form of higher steady-state delinquency, managing the productivity of loan officers, reduced credit supply for, customers and temporary impact of any potential government regulation in lines of Karnataka.
Considering the evolving business environment, we are aiming for AUM growth of 14% to 18%, of which MSL growth will be 8% to 12% and balance will come from retail finance. NIM of 12.6% to 12.8%, credit cost of 5.5% to 6%, ROA of 2.9% to 3.4% and ROE of 9.8% to 13.3% in FY ’26.
Before I hand over the forum for the Q&A session, I would like to inform you all that I shall be retiring from my role of Managing Director on 25 June 2025. With effect on 26 June 2025, I shall be appointed as Non-Executive Nominee Director subject to necessary approval from authorities and shareholders. I shall also be appointed to the Managing Board of India BV, the Holdco to support the Group. Further, our CEO, Mr Naradan, shall be appointed as Managing Director and CEO for a period of five years with effect on January — sorry, 26 June 2025, subject to necessary approval from the Reserve Bank of India as well as shareholders of the company. We look-forward to your continued support as we take our company into the next higher of the growth.
Thank you for your patience.
Questions and Answers:
Operator
Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star then 1 on their touchstone phone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Again, to register for a question, please press star then 1 our first question comes from the line of Rajiv Mehta from BS Securities. Please go-ahead. Sir,
Rajiv Mehta
Hi, good evening. Just a couple of things. Sir, when I look at the ECL coverage, I think they seems to have come down across Stage 1, 2 and 3 assets in this quarter versus previous quarter. So if you can just throw some light about has there been any revision in the ECL model? And then what levels of lease coverage has been carried forward in the guidance of credit cost that we have given?
Second is on — when I look at, say, even excluding Karataka, when I look at the other geographies and when I look at their PAR accretion, monthly PAR15 accretion rates, they are still 20 30 bps above, you know, say, exactly one year back-in March and April. So when we give out a guidance of a certain credit cost, while you’ve broken up the guidance of credit cost, are we factoring that this 2030 bps of slightly above-normal accretion trend to further normalize or you have taken that this will be the new normal in the credit cost?..
Udaya Kumar Hebbar
Thank you, Rajiv. In the case of ECL coverage, there is a minute change where in the Stage 3 borrowers who are paying more than 50% of the EMIs, we have taken a little lower credit freight cost-based on our earlier, what call experiences. So therefore, you would see about 2% variation in the totalization coverage. However, this coverage is based on 60 days DPD, not 90 day and DPD. Therefore, there is no large variation. That is one on the ACL coverage. Second or other geographies, large
Rajiv Mehta
Even the coverage of Stage 1 and Stage 2 assets has come down.
Nilesh Dalvi
So on Stage 3, as Uday said, obviously on the partial paying customers, we have taken a lower ECL in-line with the approach we had taken even in the earlier times. In Stage 2, you see the ECL it has come down because in Stage 2 there is a higher proportion of delinquency from Karnataka and Karnataka historically has a higher number of low-risk and medium-risk districts. So that’s where as you know that our ECL percentage is very — this is the district level risk profile. So that’s where the Stage 2 percentage has come down because it has a higher proportion of government.
Udaya Kumar Hebbar
The lower-risk customers and low-risk geography, that is where the, because we do the district level coverage, district coverage, the high-risk — very-high delinquency come in the low-risk where the actual — actually say slightly lower compared to others. That’s what the change.
On the other geographies, what we said is it’s largely come back to normal fee. However, if you see the — when we give the guidance, you can see the slide where the guidance is mentioned we took 3% to 3.5% for the normal for this financial year, which actually captures a us slightly elevated for this financial year. So we captured that slightly higher for this financial year. Therefore, it’s already captured within the guidance what we made. So I think I think I captured that both.
Rajiv Mehta
And sir, there is a mentioned in the slide that you are seeing improvement in-center meeting attendance. So if you can just throw some light on what kind of an improvement that you are seeing in terms of maybe percentage of attendance in the meeting? And the meeting which we have done in Q4. So if you can highlight in which functions you know, where are these employees added and in which geography?
Udaya Kumar Hebbar
Yeah. Largely employees are added in particular Tamil Nadu, we had little higher attrition compared earlier during Q3. So higher employees added in Tamil Nadu, whereas other geographies are fairly common because we didn’t have any large attrition in any other states. So therefore, it’s a normalization. We try to put little extra employees in other places.
If you see, we have almost 8% extra we have built-in actually in all places. Therefore, which will help us to monitor more and then have a higher connectivity and to have a higher follow-up sales, which will have a benefit in the coming quarters. And in case of central tenants, largely it’s improved in our geography, including the geography like Bihar, UP,, Orissa, also we are seeing a good improvement and on the people coming back to central meeting and the payment in-center is increasing actually. So we have seen a visible improvement in all geographies?
Rajiv Mehta
Okay, sir. Thank you so much and best. Thank you.
Udaya Kumar Hebbar
Thank you.
Operator
Thank you. Our next question comes from the line of Shreyash Shiwani from CLSA. Please go-ahead.
Shreya Shivani
Yeah. Hi, thank you for the — thank you for the opportunity. You have highlighted in your presentation about focus on retail finance segment as well. I wanted to understand ticket sizes in this segment have reached a certain level and they’ve been range-bound for the past four quarters. What is our outlook on how — how the retail finance segment’s ticket sizes could move? Also, during this entire last one — last couple of months of challenges, how has the retail finance books asset quality behavior been or customer behavior been? If you can highlight these two things. Thank you.
Udaya Kumar Hebbar
Thank you. Okay. Sure. On retail finance side, the average ticket size for our unsecured business loan is around 1.7 lakhs and we believe that will be range-bound. And secured business loan, the average ticket size has been around INR5.8 lakhs and that will also remain in this range, 5.5 lakh to 6 lakhs is our model and we should remain in that range. And yeah, home loans, average ticket size is around INR6.8 lakhs and that’s where it will remain. So — and euro is less than 2%, PAR 30 is around 1.5%, 1.9% and with respect to secured business loans, PAR 30 is around 0.89% and home loans, it’s a new book, so it’s almost
Shreya Shivani
Correct, got it. And sir, this segment
Udaya Kumar Hebbar
All your question?
Shreya Shivani
Yes, yes, you did. Just one follow-up — just one follow-up over here. Hello. We lost. Hello. Tell. Hello. Hello, hello.
Operator
I think starting itself robust. It’s gone.
Shreya Shivani
Yeah yeah, I can hear you.
Operator
It’s actually not from ladies and gentlemen, the line for the management seems to have disconnected. Please stay connected while we reconnect the management. Thank you evening, gentlemen. We have the line for the management reconnected. Please go-ahead, sir.
Udaya Kumar Hebbar
Yeah. Sorry, we got disconnected. So I’ll repeat what I said. So on our unsecured business loans, the current divest ticket is around 1.7 lakhs. We believe it will be range-bound around this number. And the Part 30 in this book is now 1.97. It moved from around 1% to 1.97 predominantly because of Karnataka effect. And in secured business loan, the average ticket size is around INR5.8 lakhs and PAR-30 is around 0.89. And in-home loans, the average ticket size is around INR6.8 lakhs. And since it’s a new book with around INR120 crores INR100 crores AUM, INR110 crores AUM, there is almost no part. I hope I answered your question.
Shreya Shivani
Yes, sir, you did. Just one follow-up on this. So I do believe — so you’ve always mentioned that retail finance is one segment, you’re scaling up more in your lower-risk districts, which will be more Karnataka and Maharashtra, Tamil Nadu, etc. But as of now, how much scope are you seeing for this business to — to be able to scale it up in any of your other geographies. Is there any comfort you’re seeing in any other geographies or should we just consider that will continue in Karnataka and.
Ganesh Narayanan
So what we had commented upon is that we will launch these businesses in our higher penetrated geographies because there’s a certain amount of customer-base. The model revolves around evolving with the customer, right? So from that perspective, the book is now in Karnataka, Maharashtra, Tamil Nadu and Madhya Pradesh. During the year, we would probably look at a few more districts and states where we have higher prices.
Shreya Shivani
Got it.
Ganesh Narayanan
For example, the unsecured business loan is roughly in and around 730 branches out-of-the 2063 branches. So this will scale-up slightly. With every moving year, we scale this up. All these products will move to newer.
Shreya Shivani
Got it. This is very useful. Thank you and all the best. Thank you.
Operator
Thank you. Next question comes from the line of Shweta from Elara. Please go-ahead.
Shweta Daptardar
Thank you, sir, for the opportunity. Sir, couple of questions. So I was looking at Bihar geography slide and be it GLP or borrower base, that has declined significantly in Bihar. Even the branch network has remained steady-state. PAR numbers and all are a function of base but we are of the understanding that it’s the over-leveraged borrower base that had caused miss in Bihar. Is there anything more to read that is bothering you wherein you are sort of declining your further penetration into Bihar? That’s question number-one.
Second, can you provide some color on the borrowers with over three lenders accounting for 41% of overall 15 as in or from the regional geographic perspective or from the segment perspective? Third observation is the marginal cost of borrowings have spiked quarter-on-quarter. In fact, where we started-off 9.3%, now it’s 9.6%. So how do you see this because you mentioned about liability mix being slightly nimble in your opening remarks, from that perspective, how are you perceiving marginal COB? Thank you.
Udaya Kumar Hebbar
Shutha, thank you for your question. So marginal cost is basically what we borrowed during the quarter. So there we borrowed significantly on the international fund for particularly IFC. Therefore, average cost of margin cost for the quarter was little higher than compared to the earlier borrowings. But still it is lesser than the average cost of borrowing. Our average cost of borrowing is 9.8%. Marginal cost is the borrowing what we made in Q4 is at 9.6%. Still don’t impact the overall cost of borrowing.
There is one large borrowing we did from international market. That’s why it’s slightly higher. Therefore average three times. Our second question is about Bihar. Yes, Bihar, the portfolio has come down to some extent because we look at our strong steps during September to March, September to fiscal January to handle with cash, to protect the portfolio, higher management there, higher overview from a risk audit and control side. So with which — and then also the retention team. So I think those steps actually we tried to protect portfolio for quality instead of growing during that period. Therefore, there is just slight decrease in the what you call total GLP. The reduction of our customer is basically because of rate off, which the solid rate-off, majority part comes from that geography. Therefore, the number of customers came down. But we already started growing. I think in the months of February, March, we started scaling up with the new controls, additional controls with little lower-ticket size and we implemented the customer — new customer controls quite ahead of time before even rates. I think it is growing well now and we are not withdrawing or reducing anything. We’ll continue to grow and penetrate there, but with the higher controls and systems. So we don’t see any challenges. Things are better now.
Ganesh Narayanan
This is one point on We have — we have — we also had certain people challenges, we had shortage. That has also been corrected now, yeah. And that is why you will see the reversal in Bihar is quite strong, right?
Udaya Kumar Hebbar
The reversal — reversing trend of delinquency is quite strong, quite fast. So we are quite fine there now. And the other one is of the borrower with the more than three lenders in the under Par 15, right? So it was 41% of Par 15. This is a very insignificant number, it’s not very-high actually. But it is coming down slowly. But we see that’s we already provided that which state which is high at or maybe largely in the bank. Do you have any color in that?
Ganesh Narayanan
Yeah. So Shweta, largely it will — like what we have shared earlier, the — we have a higher proportion of unique borrowers in our core markets. And obviously in the newer markets wherein we have entered over the last two to three years, there is the proportion of borrowers having more than having two or three or four lenders, that proportion is obviously relatively higher there compared to our core market.
So since you are referring to Bihar, yes, in Bihar, larger number of customers will fall within the zero to four-year vintage and that is where those borrowers in case they are having more than three lenders where the par contribution will be more. So overall par in Bihar, if you see it is 12%, then obviously, at a company-level, if the more than three lenders is accounting for, say, 40%, then in BR it will be slightly higher. But overall, it’s more of a broad-based depending upon the vintage and the overlap what we have across different states.
Shweta Daptardar
Got it.
Udaya Kumar Hebbar
So to be — be clear — to be clear, this set of customer is about 2.5% of the overall customers of the company. So it’s not so
Ganesh Narayanan
The purpose of that data point,, was to highlight that not the entire issue is not because of overall level. So the point was that 40% of the par is because of over leveraging, but the balance 60% par is because of the business-as-usual factors in addition to various other factors what we witnessed over the last 12 months in form of income variations or heat waves, migrations, ring leader issues, etc. So various factors have been playing out in addition to overly ring, right? So that’s the point we wanted.
Shweta Daptardar
Thank you. Thank you for elaboration and best of luck.
Operator
Thank you. Our next question comes from the line of from Motilal Oswal. Please go-ahead.
Abhijit Tibrewal
Yeah. Good evening, sir. Thank you for taking my question. Sir, first thing, just trying to understand, in our FY ’26 guidance, we spoke about this 8% to 12% kind of a growth in the group lending business, the GLG business and you’ve also highlighted this is because of some accelerated write-offs which are expected in 1H.
I’m just trying to understand why this year the growth is low, what date can we start seeing the group lending business growing maybe from FY ’27 onwards? So asking this because I mean we understand what the industry has gone through. And to that extent now, I mean, after some of these stress from over leveraging is behind, then at what rate can the industry be growing and within that, what could our growth look like in the group lending business?
Nilesh Dalvi
And Abhijitha, so see the guidance what we have given for next year in group lending, which is 8% to 12%. So obviously, it will be some extent, there will be an impact of write-offs what we will be taking. And if you see when we had given a guidance in month of Jan, at that time, we were anticipating that we’ll be doing the cleanup by, say, end of June.
However, because of the Karnataka issue, maybe it will get extended by another quarter and it will go to September. So predominantly, whatever write-off which will happen in next financial year will — the larger portion of that will happen in first-half. That is where you will see the overall growth will be little flattish in the first-half, ex of write-off and obviously, we will cover it up in the second-half wherein the write-offs will be more of normative in nature. From the growth perspective, obviously, the customer additions, renewals, everything will happen. But yes, because of the write-off, you will see a flattish growth in group pending business in the first-half and it will catch-up in the third and 4th-quarter.
Abhijit Tibrewal
Got it.
Nilesh Dalvi
So largely — largely on a steady-state basis, Abhijit, as we had said earlier, microfinance 14% to 15% growth on a steady-state basis is what we will always look for. And including retail finance, it will go to, 18% 20%. Next year, that 14% 15% is a little lesser because as we come out-of-the current crisis and obviously, the impact of price.
Abhijit Tibrewal
Got it. This is useful. And then the second question that I had was I joined a little late, have you already covered what we are seeing in Tamil Nadu after the introduction of the bill? Now why I ask this is very often we try to understand that, I mean what we saw in Karnata, we saw some bit of it growing, right, in media, whether we talk about some news flow around shoe sides in Karnata and then the Karnata ordinance. But I think from what I gathered by speaking to a few other MFIs is also the fact that no one saw this Tamil Nadu bill coming, while everyone acknowledges it is not really applicable to regulated entities or MFIs for that matter. So the related question is, A, what is happening in Tamil Nadu today, what is it that you are seeing? And the other thing is, are there any other states except, let’s say, Karnataka or Tamil Nadu where there are some problems today and going-forward, there could be some such ordinances get passed.
Udaya Kumar Hebbar
I think in Nadu today, ground level, there is absolutely no change or no impact as on-date, right? However, we would be mindful. Probably we would be proactive to engage with customers better. But at ground, there is absolutely no impact of this first time, right. And with respect if it’s going to come in any other state, I think we’ll have to kind of — from our perspective, we don’t see anything as a signal or sign anywhere at this point of time, but we’ll have to wait-and-watch.
Abhijit Tibrewal
Got it. The noise is there to me. And there’s more noise, but you’re not seeing any impact on your collection efficiencies or power accretion just yet.
Udaya Kumar Hebbar
Absolutely nothing. We’ve not heard this from anybody else also. Not necessarily just us.
Abhijit Tibrewal
Got it, sir. And then sir, the last question I had is, obviously, we can’t control what happens in specific states, right? But I mean this whole mini credit cycle so as to say that we went through this year, whether we Call-IT because of over leveraging heat waves, right, maybe Tamil Nadu, some unseasonal flooding cyclones. Is at least that part excluding what is happening in specific states, at least that stress is it now at least at the fag end or is it now behind us as we move into the next year?
Ganesh Narayanan
Right. That’s how it looks like for us. And hence we are saying that probably we would have a good second-half, right? And we’ve also had good monsoons. There is no other signs at this point of time, which is kind of worrying us or which is going to stress us apart from coming out of Karnataka at this point of time.
Abhijit Tibrewal
Got it, sir. This is useful. That’s all from my side. And I wish you and your team the very best.
Udaya Kumar Hebbar
Thank you.
Operator
Thank you. Our next question comes from the line of Nidesh Jain from Investec. Please go-ahead.
Nidhesh Jain
Thanks for the opportunity, sir. First question is on the credit cost. So what I gather is that on a steady-state basis also, we are seeing that the credit cost of the business will be higher than what we were anticipating before this crisis. So how are we planning in terms of yields, margins to negate the impact of higher credit cost in future, let’s say, in FY ’27 and beyond?
Udaya Kumar Hebbar
I think what we envised earlier also in May ’24 2024, that could be highly elevated. But for the next financial, we assume that it will be about 3% to 3.5% for the financial year, which is, let’s say, normal freight cost for the year. That’s what we are expecting. We need to review later after the year end, maybe three, four quarters down we will review for the future investment.
And our district based pricing and district based what you call the ACL modeling will help us to have a reasonable what you call moderation of yields, which not — will not have a too much negative impact to us because if the credit card goes up in a digit, our price also will go up to some extent. So therefore, it will not impact on the — on the yield. That is why our guidance NIM and yield are not actually different. It remains same. Impact is only to the extent of the what’s call reversal because of the request, otherwise will remain same. So therefore, we are not seeing too much impact of the pricing or our credit cost will impact on our yields.
Nidhesh Jain
I’m asking that in case the credit cost remains elevated at 3%, 3.5%, so whether there will be a yield increase on the new loans that you will be discussing because the risk has increased.
Udaya Kumar Hebbar
So I already provided. It will not be — it will not be on the — every loan in that based on the risk — higher-risk, we would actually increase the price. Or if there is a row lower if a digit, we may reduce the price for it.
Nidhesh Jain
Also, also the pricing model has a slightly longer tennel, it has to run-through the to show the impact in pricing. So we may not react immediately, but we’ll have to see the time period in our pricing policy, how the pricing moves and if there is anything, that will be slowly bus.
Udaya Kumar Hebbar
Correct. And also there is other impact in terms of — since in terms of the product borrowing impact. That’s also a declining trend is there. I think reasonably we’ll be able to manage a decent stable NIM and yields.
Nidhesh Jain
Sure, sure. And secondly, can you share the retail finance breakup in terms of secured and unsecured.
Udaya Kumar Hebbar
So the unsecured AUM is INR1,100 odd crores. And the unsecured — sorry, secured business lending is INR23 crores. I okay. So the overall mortgage book is INR350 crores. Secured business lending is around INR240 crores and home loans is around INR110 crores.
Nidhesh Jain
Sure.
Udaya Kumar Hebbar
Short-term INR543 crores finish.
Nidhesh Jain
Sure, sure. And just last question is that, so we have shared lot of data on customer leverage, et-cetera but if we include other retail loans for our customer-base, what percentage of car customers will have — other retail loans. Other than micro-finance and unsecured loans.
Udaya Kumar Hebbar
So the overall, if I remember right, the overall — retail bureau input is around 40% plus, but majority of that has consistently remained for years in gold loan. The rest of them are single-digit numbers.
Nidhesh Jain
Okay, sure. Sure. Thank you. That’s it from my side. Thank you, sir.
Operator
Thank you. Our next question comes from the line of Neima from Rescient Capital. Please go-ahead.
Chinmay Nema
Good evening, sir. Hope I’m audible.
Udaya Kumar Hebbar
Yeah.
Chinmay Nema
Sir, firstly, a slightly longer-term question. Given that the stress now seems to be subsiding, how do you see your — when do you see the PAR numbers basically reversing back to the normal levels as in the Q1 levels or what they were back-in quarter-four last year?
Udaya Kumar Hebbar
See, I think whatever the bar is created it has to take its journey. So that’s why we’ve said we will have probably a normative — normative period in H2. So H1 will remain elevated. H2 should start coming back to normalcy.
Chinmay Nema
Got it. And secondly, if — wanted to confirm, if I understood correctly, basically the provisioning has come down during the quarter, basically because you’re expecting better recoveries in Karnataga. Is that understanding correct?
Ganesh Narayanan
No, no two aspects, two aspects in this. One, because the par in Karnataka has gone up. Karnataka traditionally had a lot of lower-risk districts. So hence the weightage has fallen, right? So there is a reduction there. And second, in Stage 3, like Udai said, if customers are paying more than 50%, we have assumed a slightly lower credit cost because this is current repayments coming into the system.
Udaya Kumar Hebbar
And also the new accretion has come down comparatively compared to Q3. So that also impact which reduced the overall project new projects.
Chinmay Nema
Understood, sir. Got it. Thank you.
Operator
Thank you. Thank you. Next question comes from the line of Shreepal Doshi from Equirus. Please go-ahead.
Shreepal Doshi
Hi, sir. Thank you for giving me the opportunity. My question was on, firstly, by when do we see this more than three lender and more than 2 lakh ticket sized customers, which currently stands at closer to 20.1% and 9.5% dropping to our expected level, that’s the first question, sir. Or our targeted level rather.
Udaya Kumar Hebbar
So it’s difficult to have a targeted level here because it’s our short-term load. If you see in seven months, there is almost 10% reduction. So it will actually go on as the MFN contracts will continue to be there, so it will automatically will come down. On a normal pace, as they come back to regularize the loan with the pay — with the payback and flow sale loan, automatically come down. So overall, it’s already coming down, the journey has begun going on well. Maybe two, 3/4 it will come down to an accepted level for the — not only for us, for the whole industry also. It’s just industry targeted measures to deleverage the customers. I think it’s already working well and it continue to work well.
Shreepal Doshi
Okay. Sir, second question was like we’ve given a guidance of 5.5% to 6% credit cost for ’26, but I mean, that doesn’t have any buffer for any uncertainties that might come up in the state of Tamil Nadu from the ordinance that has come up. So just do you think there could be variation if something of that nature comes up and if you think so, then should we not already provide that buffer in the guidance?
Udaya Kumar Hebbar
See, the audience — the thought about the audience has been there for last one month or more. We are not seeing any impact in the either to us or anybody else. So therefore, we are not anticipating any anything coming, I mean practically from. So there’s always a comparison of Karnataka to Kamilado. Maybe I’ll take one minute to explain why this different. In Karnataka, what happened, there was a — and it heightened media, police, political influence and everything before the audience and that led to audience. There was a hostel situation for a month actually. By that time that the delinquencies elevated and the audience came later then with the clarity. So then slowly it came down.
In, there is no such situation at all. It is government on its own maybe follow the Garnataka model and tried to implement by excluding upfront the REs and the banks. So therefore, we are not seeing any such heightened delinquency trend coming up there. So therefore, we are not believing that at this point of time, after witnessing almost 20 days of our journey, we are not seeing any such events happening there. So of course, as far as small variation here and there, it is — we will be able to manage because that is why we said that current, what we call regular credit cost may be slightly higher, which is 3% to 3.5%, we should cover this kind of very small event. With a larger event, definitely the thing will change. So is subject to reasonable stable credit.
Shreepal Doshi
Got it, sir. Got it. And sir, just one last question. It’s more structural in nature. So what are the changes that you see every credit cycle so-far has taught us something at industry level and also at organization level, right? So this time around, what are the changes that you see are emerging maybe on, let’s say, credit underwriting side, even on tenure — tenure structuring side or even on the collection frequency side. So I mean, such as, say, maybe having credit manager at branch level, do you see such changes or such a operational changes being brought in by players in the industry.
Ganesh Narayanan
I think broadly, every set cycle takes you back-to-basics, right? So I think the fundamentals of microfinance is still intact and we need to work on strengthening process. There was a gap in a regulation for different kind of players that has also been kind of removed now. And the industry is working together in this challenge. So that’s a very big positive thing in my view.
And whatever steps we’ve taken, we are seeing it play-out. And we are also seeing that people are mindful of expansion, people are mindful of underwriting, people are taking significant steps towards better income assessment. So I think the fundamentals of lending will have to play in a significant part in — also on microfinance as we move forward. And with a strong bureau data over the period of years and like I said, since the industry is now working together under SROs, we can navigate this better and probably have better environment as we move forward. What comes to my mind. Actually you want to add?
Udaya Kumar Hebbar
I think it’s a — it’s a joint effort by the industry, by regulator and by the — with SROs actually. I think all of them are working closely to see how to navigate going-forward. The guardrails are one of the — one of the outcomes. When I say, it’s made by the industry itself. When you say, this industry made the garden. The business members are part of making that for themselves, right?
So I think there is that kind of consciousness already there, not only the guardrails and again underwriting systems, many of them are probably improving the underwriting even small case also. For example, we expanded our audit team to audit the branch at a frequency of even less than 45 days today. So which is which hard. So we have taken that kind of journey.
And then to make it more strong, we implemented the regime to accommodate the stronger control, stringent inflow, customers’ checks. So many, many measures are adopted. I think similarly, many MFI definitely would have made that. I think it’s a joint effort of our stakeholders together and what is happening. I think these learnings are definitely will be helpful for the future.
Shreepal Doshi
Thank you. Go on it, sir. So thank you so much for answering my questions. I’ll come in the queue if I have more questions.
Udaya Kumar Hebbar
Thank you.
Operator
Thank you. Thank you. Next question comes from the line of Viral Shah from IIFL Capital. Please go-ahead.
Viral Shah
Yeah, hi, sir. Thank you. Sir, two questions. One is I look at Slide number 13 and I look at the state-wise par. So when I look at Tamil Nadu, over there, I see that see for par zero, it has declined by around 80 basis-points quarter-on-quarter, whereas the 90 has actually gone up by 130 basis-points. And if I say just do a flow analysis of the flow-through rates, it seems that the flow-through rate seems to be much higher in Tamil Nadu, say compared to even something like a Bihar. Is there anything to read over here or what is it?
Ganesh Narayanan
Difficult to read because Tamil Nadu, the higher delinquency happened in January, which move into the bucket. So whereas December, December actually that moved in, whereas others from November, actually the trends reversal started early, literally one month early, maybe that March is in-between, probably that made little difference. Otherwise by and large trend is that is common across the geographies. Yeah. So, we faced little a bad situation because of rains and everything in December, as you know that all move into in March 31st.
Udaya Kumar Hebbar
And this is some competitions also there along with that, which aren’t corrected. So maybe I don’t think it issue right. So we are not seeing any very different issue in.
Viral Shah
Okay, sir. Sir, my second question is see when we talk of say near to normalized power accretion, see even ex of Karnataka, if you look at say in the month of April, it is still more than double of what it was last year. So like is it something that we should be calling or talking of say close to normalization because this is going to be a longer journey, right?
Udaya Kumar Hebbar
Yeah. I think I think where we are — where we said — we said that near normal is correct because April was a little aberration in the first-half of the month due to a lot of holidays, lot of festivals, lot of employee holidays during that period. So little aberration, but it’s already coming back to normalcy in the May itself already. So it is a temporary brief of about 15 days of April. Otherwise, we are already back into normals.
Viral Shah
But if I recall like last year, in the first-quarter when the trends had started deteriorating, the explanation was even from an industry perspective that there were heat waves and elections. So I would think that even in the base, it would have already been there.
Udaya Kumar Hebbar
No, no, I think let’s compare to March to March, April, we know that there is a flip, it is a temporary. We are aware why it happened because of holidays and and a couple of long employee holiday is also there. My transfer there. But we are aware about it. But by May, May 10, we may be May 14th, they are already back. If you look at May month, May 1 to May 14th, we are at 0.12% new attrition actually. So it’s already come back to normalcy. So it’s a question of small blip in the April per ton. So otherwise, we are definitely near normal compared to March last year or April last year.
Viral Shah
Okay. Got it, sir. And sir, last question, more, I would say, a bit philosophical. In this cycle, what is different versus in the previous cycle, how we look at and analyze this, see, historically, we always used to look at say par, right, when is the par picking out, how it is trending. Now in this entire cycle, the conversations are have moved to say incremental pace of power accretion, right? At the end-of-the day, the power is still keeping on increase.
Are we, I would say, trying to say crystal gas too much in future, say, if trends perce like this 12 months down the line, this is what it could look like. Because when we look at ex-bucket collection efficiencies by definition, sir, after nine months of pain, it has to improve, right, because we are eliminating the delinquent customers from the base.
Udaya Kumar Hebbar
Correct. So expected collections need to come below — I mean, need to be above 99.5% to reach the near normalcy, that is what we are telling largely in many states other than Karnataka where more than 99.5% to 99.7% collections collection. So why one using X bucket as a benchmark today because the current power in the system is much higher if you put the power as a control, it’s difficult to assess the actual efficiency because every power of even 0.1% actually increase the total power.
So therefore the X bucket becomes relevant today. Maybe once this entire journey of our provision and rent-off is completed, we will be back to a collection efficiency as all. So this is a currently probably expected correction is a more relevant. When you — when this whole journey completes, entire things are written-off and then you look at better ways the correction efficiency or a year kind of thing.
Ganesh Narayanan
And new accretion rate is important for you to get a view of how things are moving.
Udaya Kumar Hebbar
Trending, yeah.
Viral Shah
So fair enough, sir. I get it. But if we in the denominator in an ex-bucket collection efficiency scenario, keep on removing the delinquent customers like after nine months, say, let’s say 10%, 15% or 20% of the delinquent customers, as they keep getting removed from the denominator, the ex-bucket number will keep improving, right, because the book has not grown much in this period, right?
Udaya Kumar Hebbar
Yeah, it is, but in this period, it’s not prudent to grow the book also, right? We need to be
Viral Shah
Fair enough. So my question, sir, was more, I would say I understand from as a manager, how you want to look at it and probably this is the right metric, but more so from, say, analyzing it, are we kind of trying to jump
Udaya Kumar Hebbar
From point-of-view, we have all data. How about collection efficiency, you have par zero, Par 60, Par 90 plus, you have X bucket, you have all the pyramids available to analyze, right?
Viral Shah
Right. Fair enough, sir. Thank you. Thank you.
Operator
Thank you. Our next question comes from the line of Ashlesh Sonjay from Kotak Securities. Please go-ahead. Ashlesh, your line is unmuted. Please proceed with your question.
Ashlesh Sonje
Can you hear me?
Udaya Kumar Hebbar
Yes. Hello. Yeah, yeah. Okay.
Ashlesh Sonje
Hi, sir, good evening. Few questions from my side. Firstly, can you share the ex-bucket collection efficiency number for the month of April and May thus far? I believe we had disclosed a number of about 99.3%, 99.4% overall for the month of March. So that is one. Secondly, in your understanding, why are you not so worried about incremental drop-offs after the implementation of the three-lender cap in April because even now about 9% of your loan book is exposed to that set of borrowers? That’s the second one.
And lastly, more qualitative, when we speak to industry participants, we understand that there is a general challenge of uniquely identifying borrowers because different lenders tend to use different KYC documents. And additionally, it also seems like the credit bureau is not allowed to store or share the other number of the borrowers. So where are you and where-is the industry in general today on solving that issue? Thanks. Those are all the questions.
Udaya Kumar Hebbar
Yeah. I think expected collections are zero, zero is a 9.6%, or.
Ganesh Narayanan
On the overall — on the overall book, it is around, say, 99.2 because of Karnatak. If you exclude Karnatak, exclude Karnataka, it’s around say 99.5%
Udaya Kumar Hebbar
In the month of
Ganesh Narayanan
April, May till, May it will be better because as you see, Ashlesh, as on 11th of May, we have added we have added around, say, 12 bps of par zero. So if we continue the same trend maybe for the full month, we add around, say, 25 to 30 bps of par zero, which means that the collection ex bucket will be around 99.7%.
Udaya Kumar Hebbar
Yeah, including the — sorry, correct. That is one. Second is about the dropout and the — and the incremental growth, right? So we know that there will be about 6% of customers who have to drop and the portfolio also to some extent, we have to drop almost 5% of the company. But we feel we have an opportunity if you look at the slide, we talked about guidance, we mentioned what are the challenges and what are the opportunities that we have. We feel we will be able to acquire customers if you look at in the Q4, we acquired 2.61 lakh new customers with a 43% new.
Ashlesh Sonje
Sorry to interrupt you. Hello. Sir, this question was more around worrying about delinquencies because you won’t be able to lend to some of these borrowers.
Ganesh Narayanan
Ashlesh, the regarding your question on delinquency, see, largely as I have
Udaya Kumar Hebbar
Understand is that a couple of lenders where borrowers where we are more letters. That pool is still there around that. It will be paying 80% of them are paying.
Ganesh Narayanan
Yeah. But so Ashlesh, as you see the slide on delinquencies, wherein ex-Karnataka, we see that even in case of borrowers with more than four lenders, the par has largely been stable. So this is something we have been saying earlier also that the delinquencies have largely played out and not the entire pool having multiple lenders is bad. So there, we still have 80% customers who continue to make payments. And over a period of time normatively the customers who keep making payments, obviously at some point in time, their one or the other loan gets closed, their overall outstanding falls below 2 lakh and they again become eligible.
So this is not going to be a permanent loss for us. It is only a temporary adjustment wherein the borrowers will have to wait for some time, get their obligations under control and they again become eligible. Obviously, as of — during this time, customers who might get into delinquency, they are getting into the delinquent bucket. So that is something we have seen over the last six months. Yeah, some of it will have
Udaya Kumar Hebbar
Also we need to recognize that these are all short-term loans. It’s actually coming down faster. Maybe this month they’re not valuable, three months down, they may value it because they would have paid other three instruments to all of them whom they borrowed. I think that’s why I said 81% of those customers are all paying a good standard even today. So I think most of them will remain and by the time they come back for renewal, probably they’ll be back with eligibility. So therefore, we believe that this is not a big risk for us.
Ashlesh Sonje
Okay. Understood, sir. The question comes because in the last few months, we have seen many lenders starting to disburse as well at a fairly robust momentum. The fear is that as an how are how are we sure that the repayments which are coming through are not — are purely because of recovery in incomes and not purely because of the access to disbursements?
Udaya Kumar Hebbar
I see so long they are paying to all the lenders and when they come back for the renewal, if they are not what we call default with any other lenders and they’re within the three lenders, normal within 2 lakh, we don’t see a risk in renewing, right? That is point one. Second, find maybe some other lender they borrow — they borrow to somebody else and pay to us, but they are paying to be only one, not the entire loan, correct. And they would have borrowed with no delinquency to anybody and they’re able to get the money. I don’t think this issue there also.
Ashlesh Sonje
Understood, sir. Okay. And sir, the last one on borrower identification.
Udaya Kumar Hebbar
KYC, sorry, KOIC, we actually have to go by only water at this point of time because of the regulatory requirement. But we actually implemented the entire portal checking long back. So every put and our portal leg checking is done. So to a large extent it is — [Technical Issue]
Ganesh Narayanan
Only one impact what we have been observed earlier is the bureau, sorry, I think we lost.
Ashlesh Sonje
Sir, I can hear you. I can hear can you hear me? Hello.
Operator
So just give me one moment. Ladies and gentlemen, the line for the management seems to have been disconnected. Please stay connected while we reconnect the management back ladies and gentlemen, the line for the management has been reconnected. Please go-ahead, sir.
Udaya Kumar Hebbar
It’s such a sorry, we had some problem. So talking about the bureau data, right? So water ID is being validated to a watery portal before acquiring any customer or before giving. And lastly, this is stable across industry today. And one of the problem which we had most of the banks used to give data once in a month-by regulation become fortnite that also is a higher frequency, which helps the identification faster if any multiple learning can be checked faster.
And then even the entire regulator, particularly is tracking all the MPN members about the QVC side as well as the multiple lender side as well as the leveraging side also and I’ll give you back the data if you — if anyone. So largely, it’s a good governance there. So therefore, there may not be too much of risk coming. Of course, if other would have been there, it was very good for everybody. Unfortunately, that is not the case today. So we have to manage this would rate.
Ashlesh Sonje
Perfect, sir. Thank you. Yes, yes.
Operator
Thank you. The next question comes from the line of Hardik Shah from Goldman Sachs. Please go-ahead.
Hardik Shah
Thank you for the opportunity, sir. Am I audible?
Udaya Kumar Hebbar
Yeah.
Hardik Shah
Okay. Sir, I have two questions. One is on the growth. I appreciate you calling out group lending growth at 8% to 12% because of potential write-offs. But if you were to think about FY ’27 in a normalized environment, how should we think about growth?
If you could break that down into borrower growth and ticket size growth? Why I ask that particularly is because penetration levels in some of the large states have already reached at very-high levels, Bihar more than 90%, Karnataka, Tamiladu, 65%. So what are the states that will drive that borrower growth, if you could allude on that?
Udaya Kumar Hebbar
Yeah. I think our microphone growth would remain rangebone between 8% 40% even for FY ’27 ’28 ounce because we already said that our microphone growth will remain lower, whereas non-micro growth would be little higher to compensate that. So therefore, we believe that between 14% 15% or 12% 14% is feasible in microfinance by through new customers as well as retained customer renewals, which is still possible. So we don’t see a risk there. And the geography-wise, I think there are still many large geographies unmet.
If you look at the entire India, even by 80% of the other MFI cover districts, high districts, still you have more than 30% — 20% 40% of unmet demand there. So which we can continue to address that in the deep rural. If you look at our business is deep rural and it is still there is a high opportunity there. As you see right now, our new to credit is almost 43%, which is basically new customers, right? So that means there is a huge opportunity share.
Hardik Shah
Got it, sir, in terms of borrower and ticket size, fair to assume 8% and 4%, if you are calling 12% as the group lending or is this more going to be only borrower and ticket size kind of remains flat because we’ve already seen our level?
Udaya Kumar Hebbar
Because we always work on retaining customers and growing evolving with them. That means the retained customer will get a higher-ticket size. Therefore, there will be two sets for growth. One is growth from the new customer, that the ticket size will be lower for the current year, but by ’27, they will get the more, correct? So it’s always a continuous journey. So the growth will come from a — some percentage will come from the ticket size or on a renewal, higher renewal and how some set of growth will come from what you call new customers. So 7% to 8% may be our customer growth is that? About 10% to 15% will be the portfolio growth kind of thing.
Hardik Shah
And understood. Very clear, sir. Sir, second question is
Udaya Kumar Hebbar
Microfinance. I’m talking about microfinance only. Others is interesting.
Hardik Shah
Yes, yes, yes, of course. Yeah, am I audible, sir?
Udaya Kumar Hebbar
Yeah.
Hardik Shah
My second question is on the proposed bill by the central government banning of unauthorized Lending Act pan-India, which kind of looks like the reading looks like similar to Karnataka ordinance. So any early view on that, if at all that was to be implemented, how could you navigate that?
Udaya Kumar Hebbar
We don’t have much idea, but actually when Karnataka government was doing this regulations, actually did — did go through the draft guidelines of actually. I think it’s largely aligned with that. So we have to see which I see about it.
Hardik Shah
Okay. Okay. Thank you, sir.
Udaya Kumar Hebbar
Thank you.
Operator
Thank you. Our next question comes from the line of Bhavesh from Swan Investments. Please go-ahead.
Bhavesh Kanani
Thank you for taking my question. Question. Just a quick one. Some color on the individual loan composition we are looking at over next couple of years and the yield differential move-in the group loan and individually.
Ganesh Narayanan
Broadly, we have guided that incrementally the growth in microfinance has slowed down and the retail will catch-up and we’ve guided earlier that probably around 2028, we will have anywhere between 12% to 15% of non-microfinance loans. And yields, as we said earlier also, most of the retail finance loans are either equal or slightly lower than microfinance loans, except for home loans, which is today averaging at around 16.9%. So we will take some partnership route for home loans once we have some traction in book size and experience, thereby neutralizing any impact on yields.
Bhavesh Kanani
Okay. But would you like to call-out within this 12% to 15% individual loans, what kind of mix will be contributed by home loans?
Nilesh Dalvi
So Bhavesh, overall, the retail finance what we are looking at maybe it might reach 15% of these. So as of now, in this the secured versus unsecured is around — unsecured is 75%, secured is 25%. So maybe over next couple of years, we aim to take it to around, say, 50%, 50%. So in secured book, largely it will be the secured business loans, affordable housing loans and two-wheeler loans. And unsecured will be the individual business. So maybe it might settle somewhere around INR50-50 over next INR20.
Bhavesh Kanani
Okay. So in essence, NIM implications, you don’t see any measuring implication because of the mix change.
Udaya Kumar Hebbar
No, we don’t see any major implication on NIM, whereas you will have advantage of a cost implication — better cost implication because this is — there is no or a minimal acquisition cost because we are going to do majority of the business with our existing customer. So there is advantage of it.
Nilesh Dalvi
Bhavesh will try to be neutral at the PBD level. So since on the retail finance individual business loans, it is all given to our existing customers. And even in the secured book, which is the secured business loans and affordable housing loans, we still have around 60% existing and 40% new. So across a larger portion of the retail finance, we will not have any sourcing cost. So to that extent, our cost structures will be under control and we will try to optimize our pricing to be competitive in the industry. At the same time, ensure a consistency on the PBT front. So that’s what we’ll try to maintain the ROAs across all the products.
Bhavesh Kanani
Got it. Thanks for the responses.
Operator
Thank you. Ladies and gentlemen, we would take that as the last question for today. I now hand the conference over to the management for closing comments.
Udaya Kumar Hebbar
Thank you everybody for patiently listening and thank you for questions also continued support. Thank you very much.
Ganesh Narayanan
Thank you.
Nilesh Dalvi
Thank you all.
Operator
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.