Competition desk · Apr–Jun 2026
Small-loan lender Spandana Sphoorty Financial's June-quarter bad-loan charge went from Rs 382.57 crore to net recoveries
Spandana Sphoorty Financial makes small microfinance loans, and this matters most to the banks and other lenders that fund it: in the quarter to June 2026 money recovered on old bad loans outran new ones, a year after its bad-loan charge was bigger than its whole quarterly income. What its quarter's figures do not say is how much of its loan book is still late, and that decides how many recoveries are left to collect.
Spandana Sphoorty Financial Limited's impairment (the loan-loss charge) divided by total income, times 100.
Spandana Sphoorty Financial's loan-loss charge went from Rs 382.57 crore in the quarter to June 2025 to a write-back of Rs 10.22 crore in the quarter to June 2026, a fall of 102.7% and the largest among the five listed microfinance lenders, against a median fall of 44.8% for Fusion, CreditAccess, Muthoot Microfin and Satin. The firm says its net credit cost stayed negative in the quarter because of stronger recoveries, and that came as the share of all microfinance loans at risk (MFIN's portfolio-at-risk measure) fell from 5.6% to 1.6% over the same year, by MFIN's figures. What we don't know is whether those recoveries repeat: is this the last of the old bad loans being collected, or a book now clean enough that the charge stays near zero?
Why we think so3 reasons
On what grounds?
- The first reason is the firm's own account. Spandana's management said on its call that net credit cost stayed negative because of stronger recoveries, and that its yearly credit cost was 2.1% against 3.2% in the quarter to March. The quarterly path agrees: the charge fell from Rs 382.57 crore to Rs 218.47 crore, then Rs 43.76 crore, then a write-back of Rs 14.45 crore and a write-back of Rs 10.22 crore. So the turn happened by March, and June held it rather than deepening it. That is why the year-on-year fall is so large while total income rose only 5.9%, from Rs 264.18 crore to Rs 279.78 crore: the share of income lost to bad loans went from 144.81% to minus 3.65%, and about 95% of that move came from the charge, not from income growing.
- That firm-level turn sits inside an industry cycle. MFIN's late-loan share rose to 6.4% of all microfinance loans by December 2024, then fell to 5.6% by June 2025 and 1.6% by June 2026; MFIN credits its July 2024 guardrails and more lending to borrowers with a credit history. RBI's report shows the cost side of the same cycle: the credit cost of non-bank microfinance lenders rose from 4.4% in September 2023 to 15.5% in September 2025, "due to higher risk provisions and write-offs", and has eased since. Spandana's big charge a year ago fell in the costly stretch of that cycle; how far the cycle has further to run, these quarters cannot yet show.
- The cycle explains the direction, and the comparison with peers explains why Spandana leads this page. Every one of the five microfinance lenders booked a smaller charge: Satin down 25.6%, Muthoot Microfin down 26.7%, CreditAccess down 62.8%, Fusion down 77.8%, and only Spandana went past zero. Among the lenders of every kind that file this line at both dates, Spandana's fall of Rs 392.79 crore was the largest in rupees. Jio Financial (up 202.0%, a change of only Rs 12.34 crore) and LIC Housing Finance (down 185.2%) moved more in percentage terms, but neither is a microfinance lender, so neither speaks to the microfinance cycle this page is about.
What drove it
Spandana's own loans
- Recoveries outran new bad loans. The firm says net credit cost stayed negative in the quarter "due to stronger recoveries during the period"; its yearly credit cost was 2.1%, against 3.2% in the quarter to March. Source: Spandana's call transcript, page 2 (https://nsearchives.nseindia.com/corporate/SPANDANA_31072026105432_SETranscript24072026.pdf). How sure: the firm's own words; the size of the recoveries is not printed beside them.
- The charge fell quarter by quarter: Rs 382.57 crore (June 2025), Rs 218.47 crore (September 2025), Rs 43.76 crore (December 2025), a write-back of Rs 14.45 crore (March 2026) and a write-back of Rs 10.22 crore (June 2026).
- The September 2025 charge included Rs 86 crore of extra credit cost from a technical write-off, the firm said on its call.
- For the December 2025 quarter the firm said its credit cost was counted "after recovery and whatever the proceeds we have received from the ARC transaction" (a sale of bad loans to an asset reconstruction company); the filing's charge for that quarter was Rs 43.76 crore.
- About 95% of the fall in the share of income lost to bad loans, from 144.81% to minus 3.65%, came from the smaller charge; about 5% came from income growing.
Spandana's income and borrowing
- Income grew a little: total income rose 5.9%, from Rs 264.18 crore to Rs 279.78 crore; the firm credits a better loan mix lifting its yield.
- Borrowing got cheaper: finance cost fell 7.7%, from Rs 139.38 crore to Rs 128.59 crore; the firm says new borrowing is replacing older, dearer borrowing.
- Total expenses fell 63.5%, from Rs 703.3 crore to Rs 256.72 crore, mostly because they include the loan-loss charge.
The microfinance industry
- Late loans fell: MFIN's share of loans 31 to 180 days late went from 6.4% (December 2024) to 5.6% (June 2025) and 1.6% (June 2026); MFIN credits its guardrails and lending to borrowers with a credit history.
- RBI's measure of the same thing for non-bank microfinance lenders fell from 4.4% in September 2025 to 1.8% in March 2026.
- Credit cost of non-bank microfinance lenders rose from 4.4% (September 2023) to 15.5% (September 2025), then eased "due to lower provisioning and write-offs", RBI says.
Spandana's quarter against the same quarter a year earlier
Each line
| figure | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|
| Impairment on financial instruments | Rs 382.57 crore | Rs 218.47 crore | Rs 43.76 crore | −Rs 14.45 crore | −Rs 10.22 crore |
| Total income | Rs 264.18 crore | Rs 207.94 crore | Rs 216.47 crore | Rs 253.63 crore | Rs 279.78 crore |
| Finance cost (quarterly filing) | Rs 139.38 crore | Rs 111.37 crore | Rs 103.76 crore | Rs 121.88 crore | Rs 128.59 crore |
| Total expenses | Rs 703.30 crore | Rs 493.59 crore | Rs 325.35 crore | - | Rs 256.72 crore |
The microfinance cycle, from MFIN and RBI
How big the market is
- MFIN's total of all microfinance loans outstanding fell from Rs 433,697 crore (March 2024) to Rs 353,233 crore (June 2025) and Rs 314,728 crore (December 2025), then rose to Rs 328,708 crore (June 2026). MFIN blamed curtailed funding and stricter underwriting for the fall, and says part of the latest drop in the total came from loans being reclassified as retail loans.
How bad the loans got
- RBI found loans 31 to 180 days late across all lenders rose from 2.15% (March 2024) to 4.30% (September 2024) and 6.2% (March 2025). RBI wrote that the sector was "showing signs of stress, with rising delinquencies across all types of lenders and ticket sizes", and that the share of borrowers with four or more lenders rose from 3.6% to 5.8%.
- MFIN called the year to March 2025 "a tough year", citing a heatwave, external incitement, concerns on overleveraging and the Karnataka issue.
How lending moved
- RBI says non-bank lending to microfinance shrank 14.5% in the year to March 2025 and 8.5% in the half-year to September 2025, then grew 5.9% in the half-year to March 2026.
What RBI and MFIN did
- March 2022: RBI's master direction setting the framework for microfinance loans (https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=12256&Mode=0).
- May 2022: RBI's rules on banks and small finance banks lending to microfinance lenders for on-lending to priority sectors (https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=12317&Mode=0).
- July 2024: MFIN's members adopt guardrails, in MFIN's words "over and above those prescribed by the RBI guidelines and the Microfinance Industry Code of Conduct" (https://mfinindia.org/assets/upload_image/news/pdf/Micrometer%20Q1%20FY%2024-25%20Press%20Release.pdf).
- February 2025: RBI reviews the risk weights on microfinance loans (https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=12786&Mode=0).
- November 2025: RBI issues its directions for non-bank microfinance institutions (https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=12933&Mode=0).
How the five microfinance lenders compare
Loan-loss charge, quarter to June 2026 against the quarter to June 2025, smallest fall first:
- Satin Creditcare: down 25.6%, from Rs 134.64 crore to Rs 100.15 crore
- Muthoot Microfin: down 26.7%, from Rs 125.38 crore to Rs 91.85 crore
- CreditAccess Grameen: down 62.8%, from Rs 571.85 crore to Rs 212.5 crore
- Fusion Finance: down 77.8%, from Rs 178.86 crore to Rs 39.68 crore
- Spandana Sphoorty Financial: down 102.7%, from Rs 382.57 crore to a write-back of Rs 10.22 crore
Total income over the same year: CreditAccess up 21.9%, Muthoot Microfin up 20.0%, Spandana up 5.9%, Satin up 5.4%.
What would prove us wrong3 trip-wires
What would we have to see to drop that read?
- If Spandana's charge turns back above zero in the quarter to September 2026 with no new technical write-off, the recoveries were a one-quarter clear-out of old loans, not a cleaner book.
- If MFIN's late-loan share rises again from 1.6%, the industry turn behind Spandana's write-back has stalled, and the write-back is the firm's own recoveries outrunning the cycle.
- If Fusion, CreditAccess, Muthoot Microfin and Satin keep booking sizeable charges while Spandana stays below zero, Spandana's write-back is about its own old loans, not the microfinance market.
How Spandana Sphoorty Financial Limited moved against its peers
At Spandana Sphoorty Financial Limited, impairment on financial instruments fell 102.7%; at the typical firm it fell 44.8%
Why the share of income lost to bad loans collapsed: impairment on financial instruments and total income
Go deeper
The figures and where they came from
| Figure | Apr–Jun 2026 | Against a year earlier | Where from |
|---|---|---|---|
| Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing | Rs −10.22 crore (standalone) | Rs −392.79 crore (−102.7%) against 30 Jun 2025 | publisher |
| Total income, one NBFC, from its own quarterly filing | Rs 279.78 crore (standalone) | Rs 15.60 crore (+5.9%) against 30 Jun 2025 | publisher |
| Finance cost (quarterly filing) | Rs 128.59 crore (standalone) | Rs −10.79 crore (−7.7%) against 30 Jun 2025 | publisher |
| Total expenses, one NBFC or housing financier, from its own quarterly filing | Rs 256.72 crore (standalone) | Rs −446.58 crore (−63.5%) against 30 Jun 2025 | publisher |
| Profit before tax, one NBFC, from its own quarterly filing | Rs 23.06 crore (standalone) | no figure for 30 Jun 2025 to compare with | publisher |
| Profit for the period, one NBFC, from its own quarterly filing | Rs 16.09 crore (standalone) | no figure for 30 Jun 2025 to compare with | publisher |
| Change in Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing | Rs −392.79 crore | Our calculation, from Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing at 30 Jun 2026, less the same figure at 30 Jun 2025 | |
| Part of the share's move from the loan book growing | −8.07 points, 5% of the move | Our calculation, from impairment on financial instruments and total income at 30 June 2025 and 30 June 2026 | |
| Part of the share's move from fewer new bad loans | −140.39 points, 95% of the move | Our calculation, from impairment on financial instruments and total income at 30 June 2025 and 30 June 2026 |
What to watch3 things to watch
What happens next, and when would we know?
- Spandana's next quarter: its charge for the quarter to September 2026 against write-backs of Rs 14.45 crore and Rs 10.22 crore, and how much of its own loan book it says is still late.
- MFIN's next Micrometer report: whether the late-loan share holds near 1.6% and whether the industry's loan book keeps growing from Rs 328,708 crore.
- RBI's next Financial Stability Report: whether the credit cost of non-bank microfinance lenders keeps easing and their lending keeps growing after the 5.9% rise to March 2026.
Who this touches
Who could benefit and who is at risk, and on what condition?
This part is our opinion · every number in it comes from the Facts above · each effect is a possibility, and says what it depends on
| Who | Potential effect | How it reaches them | How sure |
|---|---|---|---|
| Borrowers | ◆ unclearpulls both ways: a healthier lender can lend again, but MFIN says more lending now goes to borrowers with a credit history; the next MFIN report on loan growth would settle it | MFIN says more lending now goes to borrowers with a credit history, which helps those borrowers and may leave out first-time ones. | Inferred · MFIN's words, not a measure of who was turned away |
| Banks | ▲ potential benefitif Spandana's own late loans have fallen as far as the industry's | Banks that lend to microfinance lenders are repaid out of those lenders' collections; recoveries outrunning new bad loans at Spandana, and MFIN's late-loan share down to 1.6%, point to safer lending to these firms. | Unresolved · Spandana's own late-loan share is not printed beside its quarter |
| Finance companies & fintech lenders | ▲ potential benefitif recoveries on old bad loans keep coming in the quarters to come | A write-back adds to profit directly, as it did for Spandana; Fusion, CreditAccess, Muthoot Microfin and Satin all booked smaller charges and gain the same way while the cycle stays on the mend. | Measured · write-backs in only two quarters so far, March and June |
| Shareholders | ▲ potential benefitif the charge stays near zero while income keeps growing | Less of each rupee earned goes to bad loans, so more reaches profit; Spandana's quarter ended with a profit of Rs 16.09 crore. | Inferred · the year-ago profit to compare with is blank |
What the big lenders reported
Each line
| firm (basis) | quarter | income | profit | its own reason |
|---|---|---|---|---|
| Spandana Sphoorty Financial (standalone) | June 2026 | Rs 279.78 crore | Rs 16.09 crore | net credit cost negative due to stronger recoveries |
| Bajaj Finance (standalone) | June 2026 | Rs 19,803.10 crore | - | - |
| Shriram Finance (group figures) | June 2026 | Rs 13,418.74 crore | - | - |
| Cholamandalam Investment and Finance (standalone) | June 2026 | Rs 8,932.95 crore | - | - |
Learn: reading Spandana Sphoorty Financial Limited's quarter
What Spandana Sphoorty Financial is. Spandana Sphoorty Financial is a microfinance lender: a finance company that is not a bank and lends in the microfinance market, the market of small loans that MFIN, the industry's own body, measures every quarter. It is for microfinance borrowers, who take its loans; the banks and other lenders that lend to it; and the people who own its shares, who live with its results.
The other words behind these figures
Who it is compared with. Five listed microfinance lenders file the figures on this page: Spandana, Fusion Finance, CreditAccess Grameen, Muthoot Microfin and Satin Creditcare. Each is read on its own books, without any companies it owns ("standalone"), so the five sit on the same basis.
What the loan-loss charge is. Each quarter a lender books a charge for loans it expects not to be repaid. The filing calls it "impairment on financial instruments". It is the charge for that quarter only, not the total set aside over the years.
What a write-back is. When money comes back on loans already written down, the recovery is set against the quarter's new charge. If recoveries are larger, the charge turns negative: a write-back, which adds to profit instead of taking from it.
What total income and total expenses are. Total income is everything the lender earned in the quarter, mostly interest on its loans. Total expenses is everything it spent, and it includes both the loan-loss charge and finance cost, so a falling loan-loss charge pulls total expenses down with it.
What finance cost is. Finance cost is the interest the lender paid in the quarter on the money it borrowed to lend on.
The share of income lost to bad loans. Dividing the loan-loss charge by total income shows how much of each rupee earned went to cover bad loans. Above 100% means the charge was bigger than everything the firm earned; below zero means recoveries added to income.
What credit cost is. Credit cost is the loan-loss charge set against the size of the loan book, stated as a yearly rate. The firm quotes its own; RBI quotes one for all non-bank microfinance lenders together.
What MFIN's late-loan measure is. MFIN's Micrometer report counts the share of all microfinance loans that are between a month and half a year behind on repayment, which it calls portfolio at risk. It is the industry's main early sign of bad loans to come.
What RBI's Financial Stability Report is. Twice a year RBI publishes a review of risks in the financial system. Its pages on microfinance give the share of loans in trouble, the credit cost of non-bank microfinance lenders and how fast their lending grew or shrank.
What MFIN's guardrails are. MFIN's guardrails are lending limits its members agreed to follow in July 2024, set, in MFIN's words, over and above RBI's own rules and the industry's code of conduct.
What a base effect is. A change measured against a year earlier can look huge because the earlier quarter was unusually high, not because the latest one is unusual. Comparing the latest quarter with the quarters in between separates the two.
How unusual, and said before
Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing changed down 102.7% year on year; median of all the 4 other microfinance lenders with both quarters, Spandana Sphoorty Financial excluded: down 44.8%; the largest fall of 5, among 5 microfinance lenders holding both quarters.
Of 4 other year-on-year comparisons of Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing for firms in microfinance lender with a quarter in 2026, 0 moved the same way by at least Rs 392.79 crore, and 0 by at least 102.7% of the prior-year figure.
Audit trail: how this card was checked, and the notes behind each figure
Status: Clear. the quarter is filed and every figure is addressed
Computed by us, from the published figures:
- Change in Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing: Rs −392.79 crore, from Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing at 30 Jun 2026, less the same figure at 30 Jun 2025
- Part of the share's move from the loan book growing: −8.07 points, 5% of the move, from impairment on financial instruments and total income at 30 June 2025 and 30 June 2026
- Part of the share's move from fewer new bad loans: −140.39 points, 95% of the move, from impairment on financial instruments and total income at 30 June 2025 and 30 June 2026
Exact figures: Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing Rs −10.22 crore (standalone), Rs −392.79 crore (−102.7%) against 30 Jun 2025; Total income, one NBFC, from its own quarterly filing Rs 279.78 crore (standalone), Rs 15.60 crore (+5.9%) against 30 Jun 2025; Finance cost (quarterly filing) Rs 128.59 crore (standalone), Rs −10.79 crore (−7.7%) against 30 Jun 2025; Total expenses, one NBFC or housing financier, from its own quarterly filing Rs 256.72 crore (standalone), Rs −446.58 crore (−63.5%) against 30 Jun 2025; Profit before tax, one NBFC, from its own quarterly filing Rs 23.06 crore (standalone); Profit for the period, one NBFC, from its own quarterly filing Rs 16.09 crore (standalone).
What the source itself warns about
- Impairment on financial instruments, one NBFC or housing financier, from its own quarterly filing. THE Ind AS "Impairment on financial instruments" ROW, and only that row. A bank on RBI's prescribed format prints "Provisions (other than tax) and Contingencies", which also carries investment provisioning and is a DIFFERENT line; it is deliberately not read into this series, so a population of banks may hold nothing here and that is honest rather than a gap. The figure is a quarter's charge, not a stock of provisions, and it is NEGATIVE where recoveries exceeded fresh provisioning — a write-back is a real reading and must not be read as zero. Basis recorded per reading. Never summed into a sector total.
- Total income, one NBFC, from its own quarterly filing. Consolidated or standalone as the filer's own heading states it, recorded on every reading — the two are NOT interchangeable and must never be compared across firms without checking. Never sum these into a sector total.
- Finance cost (quarterly filing). THE Ind AS "Finance costs" ROW, and only that row. It is the CHARGE for the quarter, never the "Finance cost paid" line of a cash flow statement, and never a component such as "Finance cost on lease liabilities" — both appear in this archive and both are refused by name. It is a PART of a finance company's total expenses and must never be added to it. Stored only where it sits between zero and the filing's own cost line. Consolidated or standalone as the filer's own heading states it, recorded on every reading; the two are NOT interchangeable. Covers a minority of the 34 tracked NBFCs and housing financiers. MAY BE EMPTY FOR THIS POPULATION and that is honest rather than a gap — only an Ind AS filer prints this row, so a population filing on RBI's prescribed format will hold nothing here. Never summed into a sector total.
- Total expenses, one NBFC or housing financier, from its own quarterly filing. THE "Total expenses" ROW OF AN Ind AS STATEMENT, which INCLUDES finance cost and impairment. It is NOT the same line as a bank's "Operating Expenses" and the two must never be compared or added: see "Operating expenses, one bank, from its own quarterly filing". Stored only where the filing's own arithmetic corroborates it — total income less total expenses within 5% of the profit before tax the filer printed — and dropped with a named reason where it does not. Basis recorded per reading. Never summed into a sector total.
- Profit before tax, one NBFC, from its own quarterly filing. Basis recorded per reading. Never summed into a sector total.
- Profit for the period, one NBFC, from its own quarterly filing. Thinner than the two above — 5 of the 28 that have filed, because the label appears twice in most statements (once as the row and once as the heading over the split between owners and minorities) and a filing with two claimants is refused rather than resolved by position.