Spandana Sphoorty Financial will continue focussing on the joint liability group (JLG), when many of its peers in the microfinance segment are shifting to the individual-lending model.

“At this point of time, there is still a lot of merit in the JLG model. The question is how well you are able to execute it,” managing director and chief executive officer (CEO) Shalabh Saxena said at a media round-table on Tuesday.

A joint liability group is an informal group consisting of four-to-ten individuals that come together for the purpose of availing bank loans on an individual basis or through group mechanism against a mutual guarantee.

On the other hand, an individual lending model enables companies to provide loans of larger ticket sizes.

The company plans to increase its assets under management to `28,000 crore by the end of 2027-28(April-March) from the current `10,000 crore.

Around 99% of its loan book is microfinance loans. Besides, the company is also offering loan against property and nano-enterprise loans through its subsidiary Criss Financial. These new businesses will comprise 10-15% of the assets under management mix by 2027-28.

Additionally, the company plans to scale its branch network to 1,950 by 2027-28 from the current 1,520. It plans to increase its employee strength to 21,000 from 12,000.

The company expects 75-80% of its collections to move to the weekly model by 2027-28, from the current 7%. It expects short-tenor loans of 12-18 months to contribute 30-45% of the tenor mix.

Broadly, Saxena noted that the loan penetration at addressable households is still at around 45-47%, and hence, there is a significant headroom to lend.

“Spandana trades at 1.5x Sep’25E P/BV. Given the strong opportunity in the microfinance sector, we think that the company is poised for a further rerating if it executes well on its stated goal of quality growth,” brokerage Motilal Oswal Financial Services said in a report on Tuesday.