Credit Saison India is moving decisively to diversify its lending mix, with secured loans set to become a larger part of its business as the company leans further into the small business economy outside the country's biggest cities. The lender, which currently manages a loan book of about Rs 25,000 crore, plans to raise the share of secured loans to 30% by the end of the current fiscal year, a shift that underscores both strategic caution and ambition in India's fast-evolving MSME finance market.
Secured Lending Shift
The company's pivot reflects a broader recalibration in non-bank and fintech-led lending, where growth is increasingly being balanced against asset quality and funding discipline. By increasing the proportion of secured loans, Credit Saison India is signalling that it wants a more resilient portfolio, particularly at a time when lenders are navigating uneven demand, tighter underwriting expectations and the need to protect margins in a highly competitive market.
Secured lending typically offers lower credit risk than unsecured exposure, because the lender has collateral to fall back on in case of delinquency. For a lender with a sizeable MSME book, this can be especially important. Small businesses often need working capital, equipment finance or expansion loans, but their cash flows can be volatile and their repayment capacity can be sensitive to local economic conditions. A greater secured mix can therefore help stabilise portfolio performance while still allowing the company to grow.
The strategy also suggests that Credit Saison India is not simply chasing volume. Instead, it is trying to build a lending platform that can scale across cycles. In the current environment, where lenders are increasingly judged on the quality of growth rather than growth alone, that distinction matters.
Tier 2, Tier 3 Focus
A key part of the expansion plan is the company's emphasis on Tier 2 and Tier 3 towns, where MSME credit demand remains structurally strong and formal lending penetration is still relatively limited. These markets are often characterised by a large base of small traders, manufacturers, distributors and service providers that require flexible financing but may not always have access to traditional bank credit on favourable terms.
For lenders, these towns offer both opportunity and complexity. The upside lies in underserved demand, repeat borrowing potential and the possibility of building long-term customer relationships. The challenge is distribution: lenders need local presence, stronger underwriting models and closer borrower engagement to manage risk effectively. Credit Saison India's plan to open more branches across the country points to a belief that physical reach still matters in MSME finance, even in an era of digital origination and data-led credit assessment.
That branch expansion could also help the company deepen relationships with borrowers who may prefer face-to-face interaction for loan servicing, documentation and renewals. In smaller markets, trust and proximity can be as important as pricing.
Growth With Discipline
The company's current Rs 25,000 crore loan book gives it meaningful scale, but the decision to rebalance toward secured assets indicates a desire to protect that scale with stronger credit structure. In India's lending landscape, especially for MSMEs, the trade-off between speed of growth and portfolio stability has become more pronounced. Lenders that expanded aggressively in unsecured segments have faced pressure from rising delinquencies and tighter scrutiny, prompting many to reassess their mix.
Credit Saison India's approach appears designed to avoid that trap. By increasing secured lending, it can potentially improve recoveries, reduce loss severity and support more predictable earnings. At the same time, the MSME focus keeps the company aligned with one of India's most important credit growth engines. Small businesses remain central to employment generation, supply chains and local economic activity, and lenders that can serve them efficiently are likely to remain relevant over the medium term.
The planned increase to 30% secured loans by FY27, if achieved on schedule, would mark a notable shift in the composition of the book and could influence how the market views the company's risk profile. It would also place Credit Saison India among lenders attempting to combine fintech-style agility with the steadier economics of collateral-backed credit.
For now, the message is clear: the company is broadening its footprint, but doing so with a more conservative balance sheet lens. In a market where growth is abundant but credit quality is paramount, that may prove to be the more durable strategy.