Bajaj Finance limits risky loans

Bajaj Finance plans to halve new loans to customers with three or more lending relationships to 3.5% by March 2027.

“Three personal loans is a single univariate metric that continues to trouble us”

Risky borrower share reduced

The company has already reduced such customers in loan originations to 7% from 14% earlier.

Credit risk focus

Bajaj Finance is particularly watchful of unsecured borrowers including self-employed customers.

Provisions for credit risk

The company made a macro-economic provision of ₹ 337 crore for credit risk.

Stage 2 and 3 assets rise

Stage 2 and 3 assets increased by ₹ 1,601 crore in Q2 including ₹ 1,047 crore from gold loans.

Gold loan strategy change

Bajaj Finance stopped short-tenure gold loans requiring branch visits every three months.

“A short-term loan doesn’t work for the customer, doesn’t work for the company, and is not sustainable”

Assets under management grow

Assets under management grew 26% to ₹ 5.84 trillion including gold loans at ₹ 24,195 crore.

Capital raise planned

Bajaj Finance seeks ₹ 17,500 crore capital raise to strengthen balance sheet.

Profit growth target

Bajaj Finance targets 20-25% annual profit growth despite credit risk measures.