Credit Saison India is moving to rebalance its lending mix toward secured assets as it seeks to deepen its presence in India's fast-growing small-business credit market. The company plans to raise secured loans to 30% of its overall book by the end of the current fiscal year, a shift that underscores both the opportunity and the caution shaping lending to micro, small and medium enterprises across the country.
With a loan book of about Rs 25,000 crore, the company is betting that a larger secured portfolio will help it scale more sustainably while broadening its geographic reach. The strategy is particularly focused on Tier 2 and Tier 3 towns, where demand for business credit is expanding but lenders often face higher underwriting complexity, thinner borrower histories and greater sensitivity to economic cycles. By increasing the share of loans backed by collateral, Credit Saison India is aiming to improve risk-adjusted returns while continuing to serve a segment that remains underpenetrated by formal finance.
Secured Lending Shift
The move toward secured lending marks a notable evolution in the company's MSME playbook. In India, unsecured business lending has grown rapidly over the past few years, driven by digital underwriting, alternative data and strong demand from smaller enterprises. But lenders have also become more selective as credit costs rise and competition intensifies. A greater emphasis on secured loans can provide a buffer against volatility, especially in segments where cash flows can be uneven and borrower profiles are less established.
For Credit Saison India, the target of 30% secured loans by FY27 signals a more balanced approach rather than a retreat from growth. The company is not abandoning MSME lending; instead, it is adjusting the composition of its book to support expansion with lower credit risk. That is especially relevant in a market where lenders are increasingly judged not just on loan growth, but on portfolio quality, collection efficiency and capital discipline.
The company's focus on smaller cities and towns also reflects a broader structural shift in Indian credit demand. As businesses outside major metros formalise operations, invest in inventory and expand distribution, they increasingly need working capital and term finance. Secured lending products, including loans against property or other collateralised structures, can be better suited to these borrowers, particularly where ticket sizes are larger or repayment tenures are longer.
Branch Expansion Strategy
Credit Saison India's plan to open more branches across the country suggests that physical presence remains central to its growth model, even in an era of digital lending. Branches can help the company build local relationships, source borrowers, assess collateral and strengthen collections in markets where trust and on-ground execution matter. In Tier 2 and Tier 3 locations, a branch-led approach can also improve access to entrepreneurs who may not be fully served by digital-only lenders.
The expansion comes at a time when lenders are competing to capture the next wave of MSME demand, particularly from businesses that are moving up the credit ladder. For a lender with a Rs 25,000 crore book, the challenge will be to grow without compromising underwriting standards. A higher secured-loan share can support that objective, but execution will depend on branch productivity, collateral valuation discipline and the ability to identify borrowers with durable repayment capacity.
The broader implication is that Credit Saison India is positioning itself for a more mature phase of growth. Rather than relying solely on fast-turnover unsecured lending, it is building a portfolio that may be slower to scale but potentially more resilient through the cycle. In a market where MSME credit remains both a priority and a risk, that balance could prove decisive.
For India's banking and fintech ecosystem, the move highlights a wider recalibration. Lenders are increasingly looking for ways to serve small businesses while protecting asset quality, and secured lending is regaining prominence as a practical route to expansion. Credit Saison India's target suggests that the company sees this as not merely a defensive adjustment, but a core pillar of its next phase of growth.