Mangal Credit & Fincorp Ltd Management Discussions

Economic Overview

Global Economy

The global economy in 2024 recorded modest yet meaningful growth, with GDP expanding by an estimated 3.2% to 3.3%. This resilience was driven by robust consumer demand, a notable recovery in global trade (up 3.8%), and the agility of key economies to navigate a complex and evolving macroeconomic environment. Among advanced economies, the United States led with a 2.8% GDP growth, supported by strong domestic consumption and a vibrant labour market. In contrast, Europe and Japan struggled with tepid expansion 0.9% and 0.1% respectively held back by elevated energy costs and weakened external demand. In the emerging world, Chinas 5.0% growth reflected a renewed focus on fiscal stimulus and manufacturing, even as property sector imbalances persisted. India emerged as a standout performer, not only sustaining high growth but also overtaking Japan to become the worlds fourth-largest economy by the end of FY24. However, growth across Latin America and Africa remained constrained due to commodity price volatility, high debt servicing costs, and limited fiscal room, which dampened investment flows and economic momentum.

Inflation, while still above target levels, continued its downward trajectory falling from 6.8% in 2023 to around 5.7–5.9% in 2024. This decline was underpinned by easing supply-side pressures and the lagged effects of tighter monetary policy across key economies. In response, central banks including the Federal Reserve, European Central Bank, and Bank of England began shifting towards a more accommodative stance, balancing the twin goals of price stability and sustainable growth. Despite signs of stabilization, the global economic environment remains clouded by rising uncertainty. A new wave of protectionist trade measures most notably, broad-based U.S. tariffs has triggered retaliatory actions, particularly from China, disrupting global supply chains and weakening investor and consumer confidence.

Outlook: 2025 and Beyond

Looking ahead, the global economy faces gathering headwinds. Growth is projected to moderate to 2.8% in 2025, down from 3.3% in the prior year, reflecting the adverse impact of escalating trade tensions and rising geopolitical friction. The return of U.S. tari_-centric policies, coupled with Chinas countermeasures including tariffs reaching up to 146% on certain U.S. goods has begun to reshape global trade dynamics and dampen cross-border economic activity.

Key macro forecasts for the medium term indicate:

• Advanced economies are likely to see subdued growth, with the U.S. projected at 1.7% and the Euro Area at 1.2% by 2026.

• Emerging and developing markets are expected to grow at ~3.9%, with Chinas growth softening to 4.0%, a marked slowdown from historical norms.

• India is expected to remain a global bright spot, sustaining high growth and deepening its position among the top global economies.

Inflation is likely to decline further, albeit at a slower pace, and will remain uneven across regions. Structural challenges such as ageing populations, elevated public debt, and the realignment of global supply chains will continue to shape the contours of long-term growth and resilience.

Indian Economy

In FY2025, the Indian economy showed impressive resilience despite global uncertainties, thanks to strong domestic growth and solid economic fundamentals. Even as the world faced rising trade tensions and a weaker global outlook, India remained one of the fastest-growing major economies. Agriculture performed particularly well, helped by a favourable monsoon, increased acreage for summer crops, and healthy harvests of both rabi and kharif crops. This not only ensured food security but also supported stable incomes in rural areas. The industrial and services sectors also stayed strong. Manufacturing activity was especially robust, with the Purchasing Managers Index reaching an eight-month high in March 2025, driven by a surge in new orders and output. On the inflation front, things improved significantly. Consumer price inflation dropped to a 67-month low of 3.3% in March 2025, mainly due to falling food prices. Meanwhile, the financial sector remained stable, supported by the Reserve Bank of Indias proactive liquidity measures. Altogether, these trends highlight Indias strong economic foundation and its ability to weather global challenges with confidence.

	Domestic Macro-Economic Scenario
	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025
Real GDP growth (%)	6.8	6.5	3.9	-5.8	9.7	7	7.6	6.5
CPI inflation (%)	3.6	3.4	4.8	6.2	5.5	6.7	5.1	4.6
WPI inflation (%)	2.9	4.3	1.7	1.3	13	9.4	0.4	2.3
Merchandise exports (%, G&S)	10.3	9.1	(5.0)	(7.5)	44.8	6.3	(3.7)	0.1
Merchandise imports (%, G&S)	19.5	10.3	(7.6)	(16.6)	55.3	16.6	(5.5)	6.2
Current account balance (% of GDP)	(1.8)	(2.1)	(0.9)	0.9	(1.2)	(2.0)	(1.0)	(1.1)
Exchange rate (INR/$ - avg.)	64.5	69.9	70.9	74.2	74.5	80.4	82.8	84.5
10-year yield (% - March-end)	7.3	7.5	6.9	6.3	6.8	7.3	7.1	6.6

Source: Department of Economic Affairs

Outlook

India is well-positioned to become a major global economic force, driven by its youthful population, rapid digital growth, and a strong foundation of policy reforms. The outlook for agriculture remains positive, with strong harvests and healthy reservoir levels providing support although potential heatwaves will need to be watched closely. The industrial sector is expected to gather further momentum, thanks to increased use of existing manufacturing capacity, rising private investment, and continued government support through initiatives like the Production Linked Incentive (PLI) scheme.

Meanwhile, services will continue to play a vital role in growth, especially in areas like technology, fintech, and infrastructure, where demand remains strong. Inflation is expected to stay under control, supported by stable commodity prices and timely actions from the central bank. Looking ahead, India stands to benefit from global supply chain shifts and growing interest from international investors seeking reliable and scalable partners. Its existing trade connections further strengthen this position. India isnt just growing its helping shape the direction of the global economy. The road ahead is full of potential, driven by ambition and a commitment to inclusive, sustainable progress.

Industry Overview

Indian Financial Services Industry

Indias financial services sector stands at the intersection of resilience, innovation, and inclusive growth. In FY2024–25, the industry continued its transformative journey supported by strong macroeconomic fundamentals, forward-looking regulation, and a rapid shift in consumer behaviour. Despite global headwinds and tighter financial conditions in advanced economies, Indias financial ecosystem remained stable and adaptive. The countrys GDP grew by over 6.5%, underpinned by robust domestic demand, a healthy credit environment, and the continued rise of digital public infrastructure. Non-Banking Financial Companies (NBFCs) become crucial pillars of Indias credit landscape offering accessible, need-based financing to segments traditionally underserved by the formal banking system. While overall bank credit growth moderated to 11% in FY25 from 20.2% in the previous year, segments such as gold loans, MSME financing, and renewable energy lending posted significant growth. Notably, loans against gold jewellery more than doubled, reflecting both rising asset values and evolving borrower preferences. The Indian financial services landscape is undergoing a digital renaissance. With UPI volumes surpassing Rs.23.6 lakh crore, and smartphones enabling real-time engagement, the ecosystem is rapidly transitioning into a mobile-first, 24/7 model of service delivery. The integration of Agentic AI across Banking, Financial Services, and Insurance (BFSI) is further enabling institutions to automate underwriting, personalize customer journeys, and scale efficiently. NBFCs are leveraging this digital shift to improve outreach, cut operational costs, and offer seamless onboarding experiences making financial services not just more efficient, but more human-centric.

From financial literacy programs to collateral-free MSME lending under CGTMSE, Indias policy environment continues to support credit accessibility. The rise of Gen Z as a digitally fluent, ethically aware customer base is pushing financial institutions to innovate responsibly—embracing convenience, transparency, and social impact in equal measure. The Reserve Bank of Indias evolving regulatory framework, coupled with SEBI and government initiatives, is fostering an ecosystem that supports innovation while safeguarding systemic stability.

Outlook

The Indian financial services sector is poised for a new era of expansive and inclusive growth, driven by a confluence of factors technological innovation, regulatory evolution, and shifting demographic dynamics. As digital infrastructure deepens its reach and AI-driven capabilities transform service delivery, financial institutions are becoming more agile, efficient, and accessible. With rising demand for personalised, transparent, and socially conscious financial solutions particularly from a growing Gen Z population the sector is evolving to meet expectations that go beyond traditional banking. At the same time, increasing formalisation of small merchants, deeper financial inclusion in rural markets, and a growing appetite for sustainable finance and renewable energy investments are reshaping the lending landscape. Backed by a proactive policy environment and Indias projected GDP growth of over 6.5%, the financial services industry is not only well-equipped to navigate ongoing global volatility, but also to emerge as a global leader in responsible, tech-enabled financial innovation.

Non-Banking Financial Companies (NBFC) Industry

Indias Non-Banking Financial Companies (NBFCs) have evolved into a dynamic force within the nations financial system bridging the critical credit gap for MSMEs, first-time borrowers, and underserved segments that lie beyond the reach of traditional banks. Their agility, deep market penetration, and tailored lending models continue to drive meaningful financial inclusion and economic participation across Bharat and India alike. As of FY 2024–25, the NBFC sectors assets under management (AUM) stood at Rs.52 lakh crore, with projections to exceed Rs.60 lakh crore by FY 2025–26. This growth has been underpinned by the sustained momentum in retail lending, particularly in MSME finance, gold loans, vehicle financing, and personal credit. Amid rising rural consumption and expanding logistics infrastructure, NBFCs have also emerged as key enablers of last-mile credit delivery.

Source: RBI report ‘Report on Trend and Progress of Banking in India, various issues- December 2024

Even as overall credit growth moderated to 13–15% from the high base of previous years, this recalibration reflects a strategic shift toward risk-optimized growth, as institutions respond to regulatory tightening around unsecured lending and asset classification norms. Importantly, the sector continues to demonstrate resilience, anchored in its transition to more secure, tech-enabled, and borrower-centric lending practices. Digital innovation has been a cornerstone of this evolution. NBFCs are leveraging mobile-first platforms, Aadhaar-based onboarding, and AI-driven credit scoring to deliver frictionless, scalable solutions. These advances, alongside strategic fintech collaborations and real-time disbursement models, are expanding the formal credit ecosystem to previously excluded geographies and demographics. Furthermore, NBFCs are increasingly at the forefront of Indias green and inclusive finance journey catalyzing growth in areas such as EV financing, affordable housing, and ESG-aligned lending. With regulatory support including lower risk weights for bank funding to NBFCs and enhanced access to long-term capital, the sector is maturing into a well-regulated, forward-looking pillar of the financial economy.

Outlook

The outlook for Indias NBFC sector remains structurally strong and optimistic. Growth will continue to be driven by rising credit demand from MSMEs and emerging middle-income households, alongside the continued shift towards secure and personalized retail lending models. The sector is expected to maintain a healthy 14–16% CAGR over the next three years, supported by repo rate cuts, favourable income tax reforms, and targeted public investments in infrastructure and entrepreneurship. With the formalisation of credit assessments, greater adoption of digital tools, and enhanced regulatory clarity, NBFCs are poised to expand their footprint while managing risk more prudently. As MSME credit already growing at over 22% YoY gains further policy tailwinds, NBFCs will play a pivotal role in unlocking Indias productive potential at the grassroots level.

SME Finance Industry

Indias Micro, Small, and Medium Enterprises (MSME) sector stands as the backbone of the nations economic architecture vibrant, resilient, and deeply intertwined with the countrys growth ambitions. With over 6.3 crore registered MSMEs employing more than 25 crore individuals, the sector contributes nearly 46% to Indias total exports, underlining its pivotal role in manufacturing, entrepreneurship, and job creation. In recent years, the sector has shown remarkable progress, with MSME exports surging from Rs.3.95 lakh crore in FY 2020–21 to Rs.12.39 lakh crore in FY 2024–25, driven by policy support, digital integration, and rising global competitiveness. The Government of India has introduced a series of structural and financial interventions from revised classification norms and enhanced credit guarantees to schemes like PMEGP, PM Vishwakarma, and Udyam Assist all aimed at fostering innovation, deepening formalisation, and enabling access to affordable credit.

Yet, the challenge remains enormous. Despite robust lending growth, a credit gap of over Rs.103 lakh crore persists in the MSME space, with formal finance reaching only a fraction of the demand. This unmet need presents a significant and scalable opportunity for NBFCs to step in as transformative enablers. With advances in embedded finance, digital underwriting, data-driven risk models, and strategic partnerships, the potential to serve this sector with precision and empathy has never been greater.

Outlook

As India progresses toward its $5 trillion economy vision, MSMEs are poised to contribute over $2 trillion, shaping the nations trajectory across domestic manufacturing, exports, and inclusive development. The outlook for FY 2025–26 is optimistic supported by policy continuity, export momentum, and the increasing global integration of Indian enterprises. For forward-looking, the SME ecosystem offers not just a business opportunity, but a mission to fuel Indias next wave of entrepreneurial growth.

Source: Care Edge, CRISIL, SIDBI

Gold Loan Industry

The gold loan industry in India has become one of the most dynamic parts of the countrys lending landscape, offering fast, collateral-based loans to millions especially those who might not have easy access to traditional banking services. By leveraging Indias deep cultural connection with gold and the growing formalisation of financial services in rural and semi-urban areas, the industry continues to expand rapidly.

As of FY 2023-24, the Indian gold loan market was valued at around Rs.19.2 lakh crore. Interestingly, 63% of this market is still dominated by the unorganised sector local pawnbrokers, family-run lenders, and other traditional players especially in smaller towns and rural areas (Tier 2 and Tier 3 cities). While these informal lenders often charge higher interest rates and offer limited consumer protection, many people continue to rely on them because they require minimal paperwork, disburse cash quickly, and enjoy long-standing trust within their communities.

On the other hand, the organised sector including banks and NBFCs accounts for about Rs.7.1 lakh crore of the total market and is growing fast. This growth is being driven by better credit assessment tools, a wider branch network, and digital innovations like paperless loans and mobile app-based services. Features like doorstep gold valuation and instant loan approvals are also making organised gold loans more convenient and accessible than ever before.

Despite Indian households owning nearly 27,000 tonnes of gold roughly 14% of the worlds total only about 5.6% of this asset is currently leveraged for loans. So, theres huge room for growth in this space.

The southern region of India leads the way, making up nearly 79% of all gold loans. This is largely due to the cultural importance of gold and higher gold ownership in southern states. Meanwhile, tighter regulation from the Reserve Bank of India is helping bring more transparency and trust to the organised sector, making gold loans a more secure and appealing option for a broader range of borrowers.

All in all, the gold loan market in India holds immense potential, combining age-old practices with modern financial innovation.

Outlook

Looking ahead, Indias gold loan industry is expected to witness significant growth, with its total market value projected to double by FY 2028-29. A major driver of this growth is the rapid expansion of the organised sector, which is set to increase its market share from 37% to over 50% by then. This shift is being fuelled by the ongoing formalisation of lending practices, improved customer service, and increasing consumer confidence in regulated financial institutions.

Government initiatives, particularly the Digital India Mission, are also playing a key role. By improving internet and mobile connectivity in rural and remote areas, these efforts are creating the digital backbone needed to make gold loans more accessible. As a result, more people especially in underserved regions are likely to embrace digital, hassle-free gold loan services in the coming years.

Personal Loan Industry

The personal loan segment in India has undergone a notable transformation over the past few years. From being a niche product category, it emerged as one of the fastest growing segments in the lending space driven by changing consumer behaviour, rising aspirations, and the proliferation of digital lending platforms. Between FY 2020 and FY 2023, unsecured personal loans recorded a rapid CAGR of approximately 45%, making it the third-largest component of NBFC assets under management (AUM).

However, this phase of aggressive growth has been followed by a period of measured correction. In FY 2024–25, the segment experienced a significant deceleration, with personal loan growth slowing to 14.9% year-on-year, compared to 17.6% in the previous fiscal. This moderation deepened further into FY 2025–26, with growth dropping to 9.2% as of January 2025, against 20.8% in the same period a year earlier. This shift is primarily attributed to regulatory tightening by the Reserve Bank of India (RBI), which raised risk weights on unsecured loans to curb excessive credit expansion, manage household leverage, and strengthen financial system resilience.

At the same time, the industry is demonstrating signs of maturity. Banks continue to target salaried individuals in Tier I cities, while NBFCs especially fintech-backed entities are expanding their reach in Tier II/III cities and semi-urban locations. These players are leveraging technology, alternate data, and embedded finance models to offer smaller-ticket, short-tenure loans with quicker turnaround times.

Recent developments also signal a growing focus on responsible lending. Rising concerns around early delinquencies and asset quality stress have led to increased industry-wide introspection. Regulatory authorities and industry stakeholders are encouraging transparency, customer protection, and grievance redressal mechanisms. The emergence of Self-Regulatory Organisations (SROs) is a positive step towards enhancing governance and standardisation across the sector.

Outlook

The personal loan industry is expected to enter a more balanced and sustainable growth phase. CRISIL Research estimates suggest personal loan growth will stabilise around 15–16% in the near term. The slowdown in unsecured lending is not indicative of a demand collapse but rather a shift towards more calibrated credit deployment.

For NBFCs, this environment presents both a challenge and an opportunity. Institutions that demonstrate prudence in underwriting, invest in robust credit analytics, adopt transparent processes, and align with evolving regulatory expectations will be better positioned to grow responsibly. As consumption-led credit demand continues to rise across urban and semi-urban India, NBFCs are well-placed to serve the aspirational middle class offering tailored, need-based personal credit with a strong emphasis on financial discipline and inclusion.

Source: RBI, CRISIL

Loan Against Property

The Loan Against Property (LAP) segment continues to gain prominence within Indias secured lending landscape, emerging as a preferred financing solution for both individuals and small businesses. In FY 2024–25, the LAP market was valued at USD 758.16 billion, driven by rising property ownership, growing liquidity needs, and increased formalisation of credit demand especially among the self-employed and MSME borrowers. With attractive interest rates, flexible repayment tenures, and minimal documentation, LAP has become a powerful financial tool to unlock the value of owned residential and commercial properties. The segments popularity has grown further with the rise of digital lending platforms and customised product offerings tailored to diverse borrower profiles across urban and semi-urban regions. In particular, Tier 2 and Tier 3 cities have emerged as strong growth zones, where monetisation of property assets is enabling credit access for previously underserved segments.

The industrys momentum is supported by the increasing presence of NBFCs and fintech lenders, who are offering tech-enabled, faster, and borrower-centric LAP solutions. The commercial property backed LAP sub-segment is projected to witness especially high growth, supported by demand from small businesses seeking working capital without forfeiting ownership.

Outlook

Looking ahead, the LAP market is expected to expand at a CAGR of 13.28%, reaching USD 1,598.23 billion by 2030. This growth trajectory is underpinned by continued urbanisation, expanding middle-class aspirations, and rising awareness about leveraging immovable assets for credit needs. The industry represents a strategic opportunity to balance growth with asset security—enabling the company to cater to the evolving financial needs of Indias emerging entrepreneurs and middle-income households, while maintaining portfolio resilience through secured lending.

Source: researchandmarkets

Company Overview

Mangal Credit & Fincorp Limited (MCFL) is an emerging trusted non-banking financial company based out of Mumbai, Maharashtra. In less than a decade of its presence, MCFL has emerged as a trusted partner of prosperity among its growing customer base. Over the years the company evolved from Wholesale

Comprehensive Product Portfolio to Retail book and is now focused on MSME loan, Gold loan, Loan against property and Personal loan. It provides tailored credit services as per the consumer needs observing the credit demand pattern in the market. The Company maintains and follows the thumb rule of customer satisfaction that includes transparent & fair experience, providing high-quality services, customer-driven approach and high focus on collaborative growth.

MSME Loan

The company specializes in providing business loans to the MSE and SME sectors. Over the past year, the company expanded its footprint by entering the state of Rajasthan, with the opening of 2 new branches. Additionally, it opened another 2 branches in Maharashtra, bringing the total to 16 branches in the state. Maharashtra, being the top MSME hub in India, accounts for 8% of the countrys total MSMEs. As of FY 2024-25, the AUM (Assets Under Management) for this segment stood at Rs.10,779 Lakh, reflecting a 15% growth compared to the previous fiscal year. This segment now constitutes 37% of the companys total AUM. Furthermore, the companys collection efficiency in this segment remains strong, as evidenced by the low delinquency rates, contributing positively to the overall financial health of the company.

Gold Loan

Over the past five years, the Companys gold loan portfolio has grown nearly sevenfold, achieving an impressive CAGR of 61%. It stands out in the industry as one of the few companies offering gold loans through a diverse, multi-channel approach including Loan at Home services, digital platforms, and physical branches. As of 31^st March 2025, the Companys total Gold Loan AUM reached Rs.12,258 Lakh, marking a 53% increase compared to the previous fiscal year. With its expanding branch network and versatile multi-channel strategy, the Company is strategically positioned to further accelerate the growth of its gold loan portfolio in the years ahead.

Loan Against Property

The Company has expanded its footprint to four states through 25 branches, strengthening its presence in Tier 2 and Tier 3 markets to grow its LAP portfolio. These regions, with a high MSME concentration, often lack access to formal credit due to limited documentation. By offering property-backed loans with longer tenures and competitive rates, Mangal Credit empowers these borrowers with funding for expansion and working capital. LAP remains a key funding source for Indias MSME sector. Mangals borrower-centric approach marked by flexible terms, easy repayment options, and minimal paperwork has positioned it as a reliable partner for small businesses. As of FY 2024–25, the LAP portfolio stood at Rs.5,405 lakh, up 15% YoY. Strong collection efficiency reflects the robustness of its secured lending model.

Personal Loan

The Company offers personal loans to a broad range of customers, including self-employed individuals, professionals, and salaried employees, with competitive terms tailored to suit their specific needs. The segment is supported by strong policies and efficient collection mechanisms, ensuring the overall quality of the portfolio remains high. As of 31^st March 2025, the total outstanding portfolio in the personal loan segment was Rs.601 Lakh. While the AUM in this segment saw a decline of 29%, the income generated from it increased by 19%, indicating a higher yield and improved operational efficiency. In line with its digitalization strategy, the Company is focusing on mobile application-based personal loans to further streamline the lending process. This approach not only enhances customer convenience but also ensures that robust risk management and collection practices are maintained.

Major Developments in FY 2024–25

FY 2024–25 was a landmark year for Mangal Credit and Fincorp Limited, marked by significant milestones, prudent execution of strategy, and measurable progress across financial, operational, and strategic dimensions. Despite macroeconomic uncertainties and an evolving regulatory environment, the Company sustained its growth momentum, expanded its footprint, and fortified its foundations for long-term value creation.

1. Listing on the National Stock Exchange of India Limited (NSE):

One of the most defining achievements of the year was the successful listing of Mangal Credit and Fincorp Limited on the NSE. This strategic milestone has not only enhanced the Companys market visibility and liquidity but has also broadened its investor base and strengthened governance practices in line with public market standards.

2. Expansion into New Geography:

In line with the Companys strategy of deepening reach into high-potential regions, Mangal Credit marked its entry into the state of Rajasthan with the opening of two new branches. This expansion reflects a focused approach to regional diversification and improved customer proximity.

3. Strengthening the Physical Network:

The branch network was expanded to 25 active locations during the year, creating a stronger on-ground presence to drive customer acquisition, credit disbursal, and relationship management. This physical expansion plays a critical role in supporting growth across all key lending verticals.

4. Growth in Assets Under Management (AUM):

The Companys AUM grew to an approximate Rs.300 Crores, reflecting increased demand for secured credit offerings, strong client retention, and deeper penetration in target customer segments such as MSMEs and gold loan borrowers.

5. Robust Financial Performance:

The year witnessed a continuation of strong financial performance, with Net Interest Margin (NIM) sustained at a healthy 12.34%, and PAT margin maintained in the range of 25%–30%. The Capital to Risk-Weighted Assets Ratio (CRAR) remained robust at 41.15%, reflecting prudent capital and risk management practices.

6. Onboarding of New Institutional Lenders:

The Company successfully onboarded five new institutional lending partners—Tata Capital, Cholamandalam Finance, Hinduja Leyland Finance, Poonawalla Fincorp, and Kissandhan Agri Finance. This strengthened the lender ecosystem and enhanced the Companys ability to scale operations while optimizing the cost of capital.

7. Team Expansion and Capability Building:

Human capital was further strengthened with the team growing to 124 professionals. Emphasis was placed on recruiting individuals with deep experience in credit underwriting, customer service, collections, and branch operations—laying the foundation for scalable growth supported by talent and process discipline.

Key Challenges Faced in FY 2024–25

While FY 2024–25 was a year of strategic progress and financial strength for Mangal Credit and Fincorp Limited, it was also shaped by a complex and evolving landscape that demanded agility, resilience, and thoughtful navigation. The Company encountered multiple challenges across macroeconomic, operational, and regulatory fronts, which it addressed through proactive planning and adaptive execution.

1. Volatility in Cost of Borrowing:

One of the most critical challenges during the year was the sustained upward pressure on the cost of funds. With interest rates remaining elevated and the liquidity environment tightening periodically, borrowing costs increased, impacting overall spreads and compelling a sharper focus on pricing strategies, liability diversification, and cost optimization.

2. Talent Acquisition and Retention in New Geographies:

As the Company expanded into newer territories, particularly in Rajasthan, hiring and retaining quality talent at the branch and regional level emerged as a significant operational challenge. Local market knowledge, credit assessment capability, and cultural alignment became crucial factors, prompting Mangal Credit to invest more deeply in structured training, onboarding, and performance management systems.

3. Regulatory Scrutiny and Compliance Complexity:

FY 2024–25 saw heightened scrutiny from regulatory authorities across the NBFC sector. Continuous updates from the Reserve Bank of India (RBI), including increased emphasis on risk-based supervision, customer data privacy, and stricter KYC/AML norms, required the Company to upgrade internal processes, invest in compliance infrastructure, and adopt more robust documentation and monitoring protocols.

4. Competitive Intensity in Core Lending Segments:

The MSME and Gold Loan segments witnessed intensified competition, with banks and large NBFCs aggressively targeting similar customer profiles. This exerted pressure on acquisition costs, interest rates, and turnaround times, making it essential for the Company to differentiate on service, relationship strength, and digital responsiveness.

5. Managing Operational Risk at Scale:

With the Company growing its branch network and team size significantly during the year, ensuring standardized processes, strong internal controls, and real-time visibility into field-level operations emerged as a key challenge. Mangal Credit responded by digitizing more customer touchpoints, strengthening audit and reporting frameworks, and embedding greater accountability at all levels of execution.

6. Evolving Customer Expectations and Financial Literacy Gaps:

As the Company serves a semi-urban and emerging middle-class customer base, it continues to face the dual challenge of meeting rising service expectations while addressing gaps in financial awareness. Bridging this gap requires not just better products, but also financial education, personalized service, and trust-building—e_orts that are ongoing and critical to long-term customer retention.

Financial Analysis

Particulars (Rs. in Lakh)	FY 2024-25	FY 2023-24
Total Revenue from Operation	4,958	3,327
Interest Income	4,804	3,215
Interest Expense	1,839	950
Total Operating Expenditure	1,068	800
Profit Before Tax	1,821	1,433
Net profit after tax before OCI	1,307	1,055
Total PAT Inclusive OCI & Exceptional Item	1,454	936
EPS (in Rs.)	6.68	5.45
Networth	13,997	12,775
Cash and Cash Equivalents	1,184	631
AUM	29,456	22,870
CRAR	41.15%	47.23%
Debt to Equity	1.41x	1.07X
Interest Income to Average Loan assets	18.55%	16.52%
Total Operating Expenditure to Average AUM	4.12%	4.11%
ROA	5.06%	5.48%
GNPA	1.19%	1.31%
NNPA	0.66%	0.75%
Provision Coverage Ratio (PCR) includes Management Provision	84.42%	80.13%

• Total Revenue saw a 49% growth, reaching Rs.4,958 Lakh in FY 2024-25 as compared to Rs.3,327 Lakh in FY 2023-24.

• Interest Income from Operations increased by 49% to Rs.4,804 Lakh in FY 2024-25 from Rs.3,215 Lakh in the prior year.

• Profit After Tax (PAT) before OCI rose to Rs.1,307 Lakh in FY 2024-25, up from Rs.1,055 Lakh in FY 2023-24.

• Loan Assets under Management (AUM) grew by 29% year-over-year, amounting to Rs.29,456 Lakh in FY 2024-25, compared to Rs.22,870 Lakh in FY 2023-24.

• Net Interest Income (NII) was up by 29%, totalling Rs.3,035 Lakh in FY 2024-25 against Rs.2,345 Lakh in the previous year.

• Gross Non-Performing Assets (GNPA) improved to 1.19% in FY 2024-25 from 1.31% in FY 2023-24.

• Net Non-Performing Assets (NNPA) declined to 0.66% in FY 2024-25 versus 0.75% in FY 2023-24.

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

The Companys Return on Net Worth improved from 7.8% in FY 2023-24 to 10.9% in FY 2024-25. This improvement is mainly attributable to higher profitability during the year, reflected in an increase in Profit After Tax from Rs.936 lakh in FY 2023-24 to Rs.1,454 lakh in FY 2024-25. The consistent accretion of profits to reserves also resulted in growth in Net Worth from Rs.12,775 lakh in FY 2023-24 to Rs.13,997 lakh in FY 2024-25. The improvement in RoNW demonstrates the Companys ability to generate enhanced returns for shareholders through efficient utilisation of capital and sustained earnings growth.

Disclosure of Accounting Treatment:

The Companys Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS), as prescribed under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and notified under Section 133 of the Companies Act, 2013. These statements are also consistent with the accounting principles generally accepted in India and other relevant provisions of the Act.

Further, the Company has duly complied with all directions relating to the implementation of Ind AS for Non-Banking Financial Companies (NBFCs), as stipulated under RBI Notification No. RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated 13th March 2020, as amended from time to time. Any guidance, clarifications, or directions issued by the RBI or other regulators are adopted and implemented as and when made applicable.

The accounting policies have been applied consistently in the preparation of the Financial Statements, except in cases where a new accounting standard has been adopted for the first time, or where revisions to existing standards necessitate changes in the previously followed accounting policies. Accordingly, for the annual audited financial statements for the year ended 31^st March 2025, the Company confirms full compliance with all applicable Accounting Standards.

Risk Management

As a Non-Banking Financial Company (NBFC), MCFL is committed to maintaining a robust risk management framework that proactively addresses the significant risks inherent to our operations, ensuring resilience in a rapidly evolving environment. Our approach is centered on consistently managing risks while striving to achieve an optimal balance between risk and return for both the organization and its shareholders.

MCFL faces risks related to credit, liquidity, operations, and market dynamics, including interest rate fluctuations. We are continuously investing in talent, processes, and cutting-edge technologies to enhance our risk management capabilities. Our ongoing efforts to fortify our risk framework have led to sustained stability in our risk metrics and financial health over the years

Credit Risk

MCFL operates under a rigorous governance framework, ensuring that risk strategies are approved by the Board of Directors and its committees, with clear delegation of credit authorities. Through robust underwriting practices and continuous risk monitoring, we maintain our portfolios within acceptable risk thresholds. To fortify our credit risk management, the company has invested in specialized resources, including a dedicated credit underwriting team, a fraud control unit, and advanced data analytics capabilities.

Liquidity Risk

MCFL effectively manages liquidity risk through a Board-approved Liquidity Risk Management Policy, fully aligned with RBI guidelines. This policy, along with operational parameters, is regularly reviewed by the Asset and Liability Management Committee (ALCO) to prevent material imbalances or excessive concentrations on either side of the balance sheet.

The Company follows a prudent approach to liquidity management, ensuring the availability of sufficient liquidity bu_ers to navigate potential mismatches, even in stressed market conditions.

Operational Risk

Operational risk arises from inadequate or failed internal processes, systems, human factors, or external events. As a lending company, MCFL inherently faces operational risk. Our objective is to manage operational risk at a level that is appropriate given the nature of our business, the markets we operate in, and the regulatory environment. To address these risks, the Company has established well-defined procedures and loan approval processes. Internal controls are reinforced through the maker-checker principle, joint custody arrangements, exception monitoring, and the clear separation of roles and responsibilities. Additionally, a comprehensive system of internal controls is in place, including transaction monitoring guidelines, necessary backup procedures, and contingency planning, all aimed at mitigating operational risk.

For information technology risks, the Company has implemented a set of IT and security-related guidelines to ensure robust governance and secure information security practices.

Market Risk

Market risk arises from fluctuations in market variables such as interest rates, foreign exchange rates, and equity prices, which impact the fair value of financial instruments and their future cash flows. The Company adheres to a prudent investment policy designed to effectively manage market risk within its investment portfolio. The Company carefully adjusts the duration of its investment portfolio to balance the dual objectives of maintaining liquidity and minimizing adverse changes in fair value.

Interest Rate Risk

The Company is exposed to interest rate risk primarily because it extends loans to clients at predetermined rates and for durations that may differ from those of its financing sources, which can have both fixed and variable interest rates. Interest rates are influenced by a variety of external factors, including inflation, RBI monetary policies, the liberalization of Indias financial sector, and regional and global economic and political conditions.

To manage and mitigate interest rate risk, the Company carefully evaluates and balances its assets and liabilities. The Asset Liability Management Committee (ALCO) oversees the implementation of the Companys interest rate policy, liquidity risk management policy and Asset Liability Management (ALM) Policy. Interest rate sensitivity is assessed using duration gap analysis to understand the impact of interest rate fluctuations on the balance sheet. This analysis is performed monthly, with sensitivity of the market value of equity to varying interest rate changes regularly reviewed and monitored.

Opportunity

Financial Inclusion & Tier-2+ Expansion

Indias rising digital adoption, smartphone penetration, and improving financial literacy across rural and semi-urban markets open vast opportunities to serve the underserved. Expanding credit access in these regions can drive inclusive growth while unlocking a large, untapped borrower base.

Rising MSME & Retail Credit Demand

The continued expansion of Indias MSME ecosystem and growing aspirations in retail lending segments present strong avenues for growth. The Companys diverse product suite—ranging from personal and professional loans to LAP, vehicle finance, and gold loans—positions it well to capitalise on this rising demand.

Digital Transformation & Fintech Collaborations

Adoption of AI-driven underwriting, data analytics, and mobile-first engagement platforms, along with strategic partnerships with fintechs, will enhance operational efficiency, lower acquisition costs, and enable the delivery of faster, more personalised financial solutions.

Product Innovation & Portfolio Diversification

Introducing new financial solutions—such as education loans, consumer durables financing, insurance-linked offerings, and working capital products—provides an opportunity to diversify income streams,

Financial Statements deepen customer relationships, and reinforce market positioning.

A_ordable LAP (Loan Against Property)

The growing demand for small-ticket, affordable LAP solutions in semi-urban and emerging markets offers the Company an attractive avenue to empower individuals and small businesses, while maintaining a secured lending focus that strengthens asset quality.

Emerging Opportunities in EV Financing

Indias accelerating electric vehicle adoption, supported by government incentives and rising consumer awareness, creates a strong growth opportunity. Building specialised financing products for two-wheelers, three-wheelers, and commercial EVs will enable the Company to capture early-mover advantage in this high-potential segment.

Threats

Regulatory & Compliance Pressures

Evolving NBFC regulations and heightened compliance requirements could materially impact operational dynamics, increase costs, and demand continuous adaptation to new regulatory frameworks.

Competitive & Technological Disruptions

The rapid rise of banks, fintech players, and digital-first NBFCs offering faster decision-making, personalised customer journeys, and aggressive pricing strategies poses a significant risk to customer retention, lending margins, and market positioning.

Macroeconomic & Credit Risks

Global geopolitical uncertainties, inflationary pressures, and domestic economic slowdowns, particularly in MSME and allied sectors, may dampen credit demand while elevating credit risk, leading to potential stress on asset quality and NPA management.

Portfolio Quality and Delinquency

The Company has implemented a rigorous risk management framework encompassing risk identification, assessment, treatment, monitoring, and reporting. This comprehensive approach has significantly reduced delinquencies.

The Company achieved a GNPA (Gross Non-Performing Assets) ratio of 1.19% in the current year against 1.31% in FY 2023-24, and a remarkable reduction in Net NPA to 0.66% in FY 2024-25 from 0.75% in FY 2023-24, reflecting the effectiveness of its strong risk management practices. Moving forward, MCFL is committed to further enhancing its portfolio monitoring, database management, and information reporting capabilities.

Human Resources

People are our key pillars of strength. This belief was further strengthened as our people showed tremendous resilience and extraordinary commitment during the pandemic times to bring the Company back to its core performance. The company has adopted people practices that enable us to attract and retain talent in an increasingly competitive market; and to foster a work culture that is always committed to providing the best opportunities to employees to realize their potential. The company is committed as an equal opportunity employer. The company works on concept of ‘Do More Earn More and rewards people for their performance and contribution which are anchored on metricized work deliverables and directly reflected in their earning potential.

MCFL has a strong orientation to learning and development. All employees, from a new joiner to a tenured one, are provided tailored learning opportunities as per their role, level, and specific focus area. In line with its business transformation strategy, the Company has made significant changes to its employee policies and practices. Performance Management is the most critical tool in the Company to drive performance and productivity & accordingly given utmost importance. This is the most important part of HR, where a manager gives his team members feedback, evaluates their work, and compensates them appropriately. Goal setting, self-assessment, managerial evaluation and review, and overall assessment with feedback are all parts of the annual performance management process. Along with its growth strategy, the Company is developing an effective human resource strategy to assist it in managing its growth. The number of employees employed as on 31^st March, 2025 stood at 124.

Internal Control System and its Adequacy

The Company has adopted policies and procedures for the governance of orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. The Companys internal control systems are commensurate with the nature of its business, the size and complexity of its operations. The internal control system is supported by an internal audit process for reviewing the design, adequacy, and efficacy of the Companys internal controls, including its systems and processes and compliance with regulations and procedures. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board, which also reviews the adequacy and effectiveness of the internal controls in the Company.

Fulfilment of the RBIS Norms and Standards

The company thrive hard to comply with various applicable RBI norms. The company is governed by Master Circular no RBI/DNBR/2016-17/44 Master Direction DNBR.PD.007/03.10.119/2016-17 dated September 1, 2016 and modified/amended from time to time. Further RBI has recently issued various circular important among them are Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs dated 22 October 2021 was issued by the RBI, which has given an implementation timeline of up to October 2022. Subject to some clarifications and detailed guidelines to be issued by the RBI, MCFL is confident of implementing these regulations on or before timeline; Prompt Corrective Action (PCA) Framework for NBFCs issued on 14 December 2021 basis analysis of financial position and performance of the company and as per the PCA framework issued by the RBI, MCFL doesnt fall into any risk threshold category.

MCFLs key regulatory ratios compared to the minimum requirements of the RBI are provided in table below –

Key Regulators Ratios	Actual as on March 31	As per RBI Stipulation
CRAR-Tier 1	41.15%	15%
CRAR-Overall	41.15%	15%
Leverage Ratio	1.42	7
ALM (Cumulative)
0-7 Days	374%	-10%
8-15 Days	315%	-10%
16-30 Days	190%	-20%

Cautionary Statement

Some forward-looking statements in this Management Discussion and Analysis Report may be based on various assumptions about the companys current and future business strategies as well as the environment in which it operates. Due to risk and uncertainties, actual results could significantly or materially differ from those that were indicated or inferred. These risks and uncertainties include the impact of domestic and international political and economic circumstances, the volatility of interest rates and the stock market, new rules and government initiatives that could have an impact on the Companys businesses, and the capability to carry out its business strategies. The Company does not have any obligation to amend these statements; the information provided here is current as of the date indicated. Even though the accuracy or completeness cannot be guaranteed, the Company has gathered all market data and other information from sources it believes to be dependable or from its own internal estimations.