Credit Saison India is sharpening its lending strategy by increasing the share of secured loans in its MSME portfolio, a move that signals a broader shift toward balance-sheet resilience and deeper geographic reach. The company expects secured lending to account for 30% of its total loans by the end of FY27, up from a smaller base today, as it expands beyond its core unsecured and working-capital offerings.
Secured Push Gains Pace
The lender's decision comes at a time when non-bank financiers are reassessing risk, pricing and growth in India's small-business credit market. By leaning more heavily into secured loans, Credit Saison India is positioning itself to serve a wider set of borrowers while reducing portfolio volatility. The company's current loan book stands at Rs 25,000 crore, and management is seeking to diversify that book with products backed by collateral, particularly for MSMEs in smaller cities and emerging commercial centres.
The emphasis on secured lending is notable because MSME credit in India has traditionally been dominated by short-tenor, higher-yield unsecured products, especially among fintech-led lenders. While those products can deliver rapid growth, they also carry higher credit risk and greater sensitivity to economic stress. A larger secured component can help lenders improve asset quality, extend tenor and potentially access a more stable borrower base, even if it may temper near-term yield expansion.
Tier 2, Tier 3 Focus
Credit Saison India's expansion strategy is closely tied to Tier 2 and Tier 3 towns, where formal credit demand remains underpenetrated relative to the scale of business activity. These markets often house manufacturing clusters, trading businesses, distributors and service enterprises that need working capital, equipment finance and property-backed loans but may not have the same access to large-bank credit as borrowers in metro areas.
For lenders, these locations offer both opportunity and complexity. Borrowers may be more relationship-driven, underwriting can be more granular, and branch presence still matters in many cases. Credit Saison India's plan to open more branches across the country suggests it is betting on a hybrid model that combines digital sourcing with on-ground distribution and local credit assessment. That approach could help the company build stronger origination pipelines and improve customer retention in markets where trust and proximity remain important.
The branch expansion also indicates that the company is not relying solely on platform-led lending or partner channels to scale. Instead, it appears to be building a more traditional lending footprint alongside its technology-led capabilities, a model increasingly favoured by lenders that want to move up the credit curve without sacrificing growth.
Portfolio Rebalancing Strategy
The target of 30% secured loans by FY27 is more than a product shift; it is a portfolio rebalancing exercise. For a lender with a Rs 25,000 crore book, even a modest change in mix can materially affect risk-weighted assets, capital planning and earnings stability. Secured loans, depending on structure and collateral quality, can improve recoverability and support more disciplined underwriting, though they may require longer origination cycles and more intensive documentation.
The move also reflects a broader trend in India's financial sector, where lenders are seeking to diversify away from concentrated exposure to unsecured consumer and small-business segments. As competition intensifies and credit cycles normalise, institutions with a more diversified asset mix may be better placed to preserve margins and manage delinquencies.
For Credit Saison India, the challenge will be execution. Expanding into secured MSME lending requires robust collateral valuation, legal enforcement capabilities, branch-level credit expertise and a consistent borrower acquisition strategy. The company will need to balance growth ambitions with underwriting discipline, especially as it enters smaller towns where business models can be more varied and cash flows less formalised.
Still, the direction is clear: Credit Saison India is seeking to evolve from a fast-growing lender into a more diversified credit institution with a stronger secured base. If the company can scale this shift while maintaining asset quality, the strategy could strengthen its position in India's increasingly competitive MSME finance market.