Shares of CreditAccess Grameen rose 4.24% to Rs 994.80 in morning trade on April 10 after the country’s largest pure-play microfinance institution reported strong growth in disbursements and client additions in Q4FY23.

Sharing its unaudited provisional figures for the fourth quarter, CreditAccess Grameen said its assets under management (AUM) rose 27% year-on-year to Rs 21,032 crore in the quarter that ended March 2023.

It said in a regulatory filing dated April 6 that expenses rose by 24% to Rs 7,171 crore from Rs 5,792 crore in Q4FY22.

On a sequential basis, expenses rose by 48% from Rs 4,847 crore in Q3FY23. For the full fiscal year 2022-23, expenditure climbed 20% to Rs 18,539 crore from Rs 15,466 crore in FY22.

The number of customers in the fourth quarter of FY23 was 43.1 lakh, compared to 38.2 lahks in the same period of the previous financial year, an increase of 13%. The company’s branch count rose 9% to 1,782 from 1,635 a year earlier.

CreditAccess Grameen is a Bengaluru-based Microfinance Institution (MFI) sponsored by Credit Access India BV (CAI) with an approximate 73% stake as of December 2022. It targets low-income households without access to traditional sources of financing.

The company has a significant presence in Karnataka (contributing about 35%), Maharashtra (about 21%) and Tamil Nadu (about 21%). Together, these three states contributed 77% of their gross loan portfolio (GLP).

Data compiled by the Microfinance Institutions Network (MFIN) showed that total loans in India’s microfinance sector rose by 25.2% year-on-year at the end of the December quarter.

MFIN said in a statement on March 16 that its total loan portfolio rose to Rs 3.2 lakh crore as of end-December from Rs 2.56 lakh crore a year earlier.

Microfinance institutions provide small loans to low-income borrowers, usually raising funds from banks to do business. Microlenders face funding challenges and have seen collections drop during the pandemic. The collection has grown since then.

In a recent report, ICICI Direct had a ‘buy’ call on CreditAccess Grameen with a target price of Rs 1,100. CreditAccess Grameen is also one of domestic research firm KRChoksey’s top picks for April.