Jana Small Finance Bank is restructuring its loan book to significantly reduce reliance on unsecured lending, targeting a portfolio where secured loans account for 80% of total advances within two years.
The lender currently holds unsecured loans at approximately 27% of its gross advances and aims to bring that figure down to 22-23% in the near term, with a long-term objective of an 80:20 secured-to-unsecured split.
This strategic pivot reflects a broader industry trend among Indian small finance banks to de-risk their balance sheets amid rising credit costs and regulatory scrutiny on unsecured exposures.
The bank expects its proposed partnership with TVS Motor Company to be a key driver in this transition, specifically boosting its two-wheeler financing business.
By anchoring growth in secured vehicle loans, Jana SFB seeks to improve asset quality while maintaining volume growth.
The move aligns with the bank’s efforts to diversify its funding and lending mix, reducing concentration risk in high-yield but volatile unsecured segments such as personal loans and micro-enterprise credit.