YES Bank to buy microfinance firms in FY24 to boost priority sector lending

YES Bank is evaluating microfinance companies to acquire in order to boost its PSL (priority sector lending) portfolio and reduce the drag of legacy PSL issues, MD and CEO Prashant Kumar said.

“During Q1, the bank has bought PSL certificates amounting to Rs. 4,300 crore. For reducing RIDF (Rural Infrastructure Development Fund) drag, the bank continues to actively engage with select BC (banking correspondent) partners for organic growth opportunities while we simultaneously evaluate target for potential acquisition as well,” he said.

While it is still evaluating microfinance entities and the entire process is taking some time, the bank has maintained the guidance of making such an acquisition in FY24, Kumar said, adding that the bank is also looking at other options such as co-lending and portfolio buyouts even as it grows the agriculture and SME loan books.

“The focus is on the rural market, we would definitely like to see much higher disbursements and a higher book on the rural side,” he said.