Credit Saison India is sharpening its lending strategy around secured assets as it seeks to scale its small business franchise in India's fast-growing non-metro markets. The company, which currently manages a loan book of about Rs 25,000 crore, plans to increase the share of secured loans to 30% by the end of FY27, a move that reflects both risk management priorities and a deeper push into the country's underpenetrated MSME segment.
Secured Lending Shift
The diversification comes at a time when lenders serving micro, small and medium enterprises are balancing growth with asset quality discipline. By increasing the proportion of secured loans, Credit Saison India is positioning itself to reduce portfolio volatility while expanding into businesses that can offer collateral-backed credit demand. The company's focus is especially on Tier 2 and Tier 3 towns, where formal credit access remains uneven and where demand for working capital, equipment finance and business expansion loans continues to rise.
The move is notable because MSME lending in India has increasingly become a battleground for banks, non-bank lenders and fintech-backed credit platforms. Unsecured lending can deliver faster growth and higher yields, but it also carries greater credit risk, particularly in segments sensitive to economic cycles and cash-flow disruptions. A larger secured book can improve resilience, especially for a lender that is scaling across geographies and borrower profiles.
Credit Saison India's target suggests a more measured expansion strategy than pure growth-at-all-costs lending. The company appears to be leaning into a model that can support longer-tenor relationships with borrowers while improving recoverability and underwriting comfort. For a lender with a Rs 25,000 crore book, even a gradual shift in mix can materially alter portfolio quality, capital allocation and branch-level business economics.
MSME Growth Strategy
The company's emphasis on Tier 2 and Tier 3 towns is consistent with a broader structural trend in Indian finance: credit demand is moving beyond the largest urban centres as formal businesses deepen their operations in smaller cities. These markets often combine strong entrepreneurial activity with limited access to diversified lending channels, creating room for lenders that can build local distribution and relationship-based underwriting.
Credit Saison India plans to open more branches across the country, indicating that physical presence remains central to its growth model. In MSME lending, branches can be critical for sourcing borrowers, assessing collateral, building trust and servicing accounts. While digital origination has transformed consumer and small-ticket lending, secured MSME credit still depends heavily on on-ground evaluation and local market knowledge.
The branch expansion also signals confidence in the long-term opportunity in India's formal credit ecosystem. As more small businesses seek to upgrade equipment, expand inventory or purchase property, demand for secured financing is likely to grow alongside the broader formalisation of the economy. For lenders, that creates a chance to deepen customer relationships and cross-sell additional products over time.
Portfolio And Risk Balance
The planned increase in secured lending should also be read as a response to the competitive and regulatory environment in Indian lending. Lenders are under pressure to maintain prudent underwriting standards while continuing to serve underserved segments. A secured portfolio can offer a more stable base for growth, particularly when lenders are expanding into newer markets where borrower histories may be thinner and cash flows more seasonal.
At the same time, the shift does not imply a retreat from MSME lending. Rather, it suggests a recalibration of how that lending is structured. Credit Saison India is still targeting the same broad borrower universe, but with a greater preference for loans backed by collateral and supported by local branch networks. That approach may allow the company to scale more sustainably while preserving credit quality through economic cycles.
For the wider market, the move underscores a growing recognition that India's next phase of lending growth may come not only from speed and digital distribution, but also from disciplined expansion into secured credit. If Credit Saison India meets its FY27 target, it will have materially altered the composition of its book and strengthened its position in one of the country's most competitive lending segments.