Satin Creditcare Network Ltd Management Discussions

ECONOMIC OVERVIEW -

Global Economic Overview

Global economy continues to demonstrate remarkable resilience despite geopolitical uncertainty, shifting trade dynamics, climate-related disruptions, and financial market volatility. IMF projects global growth broadly stable at around 3.1%–3.3% over medium term.

Geopolitical developments remain significant source of uncertainty. Escalating tensions in Middle East involving Iran, Israel, and United States heightened concerns around energy security and global trade, particularly through Strait of Hormuz and Red Sea. Prolonged Russia-Ukraine conflict continues to affect energy markets and commodity supply chains, especially across Europe. Strategic competition between United States and China - tariffs, technology restrictions, competition for critical minerals - accelerating reconfiguration of global supply chains through friend-shoring and near-shoring. Governments and businesses reassessing sourcing models, investment priorities, geographic exposure; increasing investments in domestic manufacturing, energy security, strategic infrastructure.

Technological innovation emerging as powerful counterbalance: advances in AI, automation, advanced analytics, digital technologies improving productivity, operational efficiency, decision-making across industries.

Growth prospects uneven across regions. Advanced economies expected to expand at moderate pace supported by fiscal spending, infrastructure investments, continued digital transformation. Europe: higher public expenditure particularly in Germany, stronger performances in Ireland and Spain helping sustain momentum. Emerging markets and developing economies benefit from policy support, reform-driven growth, improving macroeconomic stability; inclusive financial services and microfinance institutions remain important enablers of domestic demand.

Inflationary pressures relatively contained despite periodic volatility. Global headline inflation projected to rise from 4.1% in 2025 to 4.4% in 2026 before easing to 3.7% in 2027. Energy markets expected to remain sensitive to supply-side disruptions and geopolitical developments. Improving supply-chain efficiencies, moderating input costs, ongoing policy normalization expected to support gradual return to greater price stability over medium term.

Looking ahead, focus shifting from crisis management to resilience building. Efforts to diversify supply chains, strengthen energy security, accelerate digital transformation reshaping investment patterns worldwide. Geopolitical tensions and policy uncertainty may weigh on sentiment near term; impact on growth expected to moderate gradually. Sustained investments in technology and productivity-enhancing infrastructure likely to strengthen foundations of global growth and support more stable and sustainable economic trajectory.

GDP Growth Projections (in %) - chart (Source: World Economic Outlook, April 2026). Data labels visible: Global Economy 3.4/3.1/3.2; Advanced Economies 1.9/1.8/1.7; United States 2.1/2.3/2.1; Euro Area 1.4/1.1/1.2; Emerging Markets & Developing Economies 4.4/3.9/4.2; China 5.0/4.4/4.0; The Middle East & Central Asia 3.6/1.9/4.6; Sub-Saharan Africa 4.5/4.3/4.4; Latin America & Caribbean 2.4/2.3/2.7; Emerging Europe 2.0/2.0/2.1; India 7.6/6.5/6.5. Chart image present but values extracted from labels.

Outlook: Baseline outlook remains stable but balance of risks tilted to downside. Escalating trade frictions, persistent geopolitical flashpoints, elevated public debt could tighten global financial conditions and dampen momentum. Any reorientation of expectations around productivity gains from AI-led investments may trigger market volatility. Conversely, broader/faster adoption of AI and emerging technologies could enhance productivity, improve resource efficiency, provide upside to global growth over medium term. Structural headwinds: benefit of technological progress unevenly distributed across regions and sectors. Policymakers prioritizing rebuilding fiscal buffers, preserving macro-financial stability, advancing structural reforms.

(Source: IMF World Economic Outlook, April 2026)

Indian Economic Overview: India remains key driver of global growth with real GDP expanding by 7.7% in 2025-26, reinforcing position as fastest-growing major economy. Supported by resilient domestic demand, sustained investment activity, consumption-led growth model. Private consumption key contributor; strong public investment, momentum across services sector, improving rural demand further strengthened growth trajectory. Significant shift: rural consumption strengthened. NABARD survey: rural demand outpaced urban consumption, driven by normal monsoon in 2025-26, improved agricultural output, moderating inflation, expanded credit access and government impetus. Rising household spending and gradual shift toward non-farm income sources reshaping expenditure patterns. Rural India evolving beyond traditional supply-side contributor to critical driver of consumption-led growth. Increasing digital adoption, expanding internet penetration, growing use of technology enhancing productivity, improving market access, creating new opportunities across urban and rural India.

Indias strong macroeconomic fundamentals reinforce domestic growth drivers. Contained inflation, stable employment, healthy agricultural output, rising real incomes supporting purchasing power; policy measures including tax rationalization boosting household consumption. These factors insulate domestic economy from external volatilities including trade disruptions, tariff pressures, capital flow uncertainty.

Investment boosting supply side. Gross Fixed Capital Formation estimated at 30% of GDP, reflecting confidence in medium-term prospects. Public capital expenditure, ongoing infrastructure creation, improving private sector sentiment bolstering investment cycle. Stable financial system, prudent fiscal management, ongoing structural reforms contributing to more durable growth trajectory.

Performance of Key Sectors in 2025-26:

• Agriculture and Allied Sectors: grew by 3.1% with favorable monsoon conditions and sustained growth in allied activities such as livestock and fisheries.
• Industry: grew by 6.2% in 2025-26, driven by momentum in manufacturing and construction. Strong demand for core materials such as steel and cement.
• Services: grew by 9.1% in 2025-26, supported by broad-based expansion across service segments.

Inflationary pressures eased; headline CPI inflation averaging around 1.7% during April-December 2025-26, aided by softer food prices and stable supply conditions. RBI reduced repo rate by cumulative 100 basis points during financial year; kept repo rate unchanged at 5.25% as of June 2026. Fiscal dynamics supportive yet disciplined: healthy direct and indirect tax collections, continued GST rationalization, calibrated expenditure prioritization enabled Government to sustain capital spending while meeting social commitments. Fiscal deficit broadly in line with budgeted targets.

Monetary policy complemented this posture. Cumulative repo rate cuts, targeted liquidity measures, healthier banking sector balance sheets improved systemic liquidity and strengthened monetary transmission. Borrowing conditions more supportive; improved liquidity and transmission enhanced funding access for microfinance institutions.

(Source: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219912&lang=1&reg=3&utm_)

GDP Growth Rate (in %) - chart: FY 2021-22: 8.7; FY 2022-23: 7.0; FY 2023-24: 7.2; FY 2024-25: 6.5; FY 2025-26: 7.7.

Outlook: According to RBI, Indias real GDP growth expected to remain strong at 6.6% in 2026-27, supported by resilient domestic demand and broad-based economic momentum. Consumption in semi-urban and rural areas, improving investment sentiments, healthier balance sheets across households and corporates, sustained public investment in infrastructure expected to remain key drivers.

External headwinds may intermittently pose risk: slower growth in key trading partners, evolving trade policies, bouts of financial market volatility could weigh on exports and capital flows. Ongoing trade negotiations with major economies including United States may help moderate some uncertainties.

Indias macroeconomic fundamentals remain supportive of sustained growth. Stable inflation, prudent fiscal management, strengthening financial sector, continued progress on structural reforms provide policy continuity and shock absorption. Continued investments in digital public infrastructure, technology adoption, innovation-led productivity improvements expected to reinforce long-term growth potential and enhance economic competitiveness.

INDUSTRY OVERVIEW - Indian BFSI Sector Review

Indian BFSI sector continued strong performance during 2025-26, supported by robust macroeconomic fundamentals, improving liquidity conditions, sustained credit growth, increasing formalization of financial services. Sector benefited from stable regulatory environment, healthy balance sheets across financial institutions, continued progress in financial inclusion and digital adoption.

As highlighted in Economic Survey 2025-26, financial sector delivered robust performance during April-December 2025, supported by sound institutional fundamentals. Monetary policy supportive: RBI lowered policy repo rate by cumulative 100 basis points to 5.25%. At June 2026 MPC meeting, RBI opted to pause further rate action and retained neutral stance amid rising geopolitical uncertainties, potential supply-chain disruptions and inflationary risks linked to energy prices.

Digitization continued to reshape operating landscape. As per Ministry of Finance, digital transactions reached 20,343 Crores in volume by December 31, 2025, with aggregate value of INR 2,357 Lakh Crores. Expansion of digital payments and technology-led platforms strengthened customer access, improved efficiency and transaction convenience, widened reach of formal finance across geographies. Growing adoption of digital public infrastructure including Aadhaar, UPI, Account Aggregator frameworks, and digital lending ecosystems enhanced customer onboarding, credit assessment, service delivery, and financial accessibility.

Overall, during 2025-26, sectoral momentum supported by favorable policy conditions, rapid digitization, wider financial inclusion. Rising financial awareness, expanding digital adoption, stronger balance sheets continue to fortify growth trajectory. Operational discipline, technology integration, customer-focused delivery remain critical.

Within broader BFSI landscape, financial inclusion key enabler of equitable economic growth and formal credit penetration. Ecosystem encompasses microfinance, MSME financing, affordable housing, sustainable finance, alternative investment platforms. MSME sector continues to drive entrepreneurship, employment generation and local economic development; affordable housing finance expanding access to home ownership for low- and middle-income households. Alternative Investment Funds playing increasingly important role in channeling long-term capital toward high-growth businesses, infrastructure development and emerging sectors. MSME sector comprises over 7.47 Crore enterprises, employs more than 32 Crore people, contributes approximately 31% of Indias GDP, accounts for over 45% of exports. NBFC-MFIs remained key pillar of Indias microfinance ecosystem during 2025-26; as per MFIN data as of March 31, 2026, NBFC-MFIs accounted for 44.2% of countrys microfinance portfolio.

Sustainability considerations continued to assume greater significance, with increasing emphasis on responsible lending practices, financial inclusion, alignment with ESG principles. Microfinance institutions play pivotal role in advancing inclusive growth, empowering women, supporting rural livelihood generation.

Indian Microfinance Sector Review: Sector occupies central position within financial inclusion landscape, extending small-ticket formal credit to underserved and low-income households, particularly prioritizing women, rural communities, and informal workers. Ecosystem spans NBFC-MFIs, banks, small finance banks, other regulated entities, delivering credit through group-based and individual lending models. Sector evolved into significant channel for livelihood financing and enterprise development.

Credit environment during 2025-26 characterized by cautious lender sentiment. Sector witnessed phase of portfolio recalibration, with lenders emphasizing portfolio quality, credit discipline and borrower sustainability over rapid expansion. Following period of elevated stress across certain borrower segments, institutions adopted more prudent underwriting standards, strengthened collection mechanisms, enhanced portfolio monitoring frameworks. As of March 31, 2026, microfinance industry reported gross loan portfolio (GLP) of INR 3,25,174 Crores, serving 6.4 Crore unique borrowers through 10.1 Crore active loan accounts. Industry portfolio moderated by 13.3% YoY. Portfolio quality improved significantly: PAR 31-180 days declining to 1.2% as of March 2026 from 3.5% a year earlier. Average loan outstanding per account increased to approximately INR 32,177 from INR 28,174 a year earlier.

Portfolio composition reflects evolving industry dynamics. NBFC-MFIs retained leadership position; sector witnessed realignment in reported portfolio balances owing to migration of certain exposures from microfinance segment to retail portfolios, particularly among banks. Reported portfolio trends influenced not only by moderation in portfolio growth but also classification-related adjustments. Shift reflects combination of cyclical moderation in sector growth and portfolio reclassification.

Looking ahead, relevance of microfinance sector expected to extend beyond credit delivery to supporting broader economic participation. Industry serving 6.4 Crore unique borrowers; scale and reach position it as one of countrys largest channels of grassroots credit delivery. As rural incomes diversify, self-employment activities expand, micro-enterprises become increasingly integrated into local value chains, demand for formal financial services likely to evolve in scale and complexity. Sectors extensive distribution network, customer proximity, ability to bridge last-mile financing gaps remain critical.

Portfolio Outstanding of the Microfinance Industry (INR Crores) - chart (Source: Micrometer Report, March 2026):

• NBFC-MFIs: March 31, 2025: 1,47,556; March 31, 2026: 1,43,586; Change (YoY): (2.7%)
• Banks: March 31, 2025: 1,22,826; March 31, 2026: 86,033; Change (YoY): (30.0%)
• SFB: March 31, 2025: 59,252; March 31, 2026: 51,238; Change (YoY): (13.5%)
• NBFC: March 31, 2025: 42,129; March 31, 2026: 40,013; Change (YoY): (5.0%)

Indian NBFC-MFI Sector Review: As largest provider of microcredit in India, NBFC-MFIs remained cornerstone of Indias microfinance ecosystem during 2025-26. Despite measured growth environment, sector demonstrated resilience through disciplined portfolio management, stronger underwriting practices, sustained focus on asset quality.

Structure largely concentrated among larger institutions. Based on MFIN data: 13 large institutions with AUM exceeding INR 2,000 Crores, 5 medium-sized institutions with AUM between INR 500 Crores and INR 2,000 Crores, 20 small institutions with AUM below INR 500 Crores. Large NBFC-MFIs accounted for over 94% of total AUM and nearly 92% of client base. As of March 31, 2026, NBFC-MFIs operated through 22,577 branches and employed 1,94,285 personnel, including 1,19,856 loan officers (61.7% of workforce). Branch network expanded marginally by 0.5% YoY; total employee strength and loan officer count declined by 11.0% and 13.1% respectively vs March 31, 2025.

Sector continued under RBIs principles-based regulatory framework emphasizing responsible lending and institutional accountability. Framework requires board-approved policies for assessing household income and repayment capacity, transparent pricing, adherence to fair-practices - move away from earlier rule-based model. Retains definition of microfinance loans as collateral-free credit to households with annual income up to INR 3 Lakhs. Sector oversight fortified through greater linkage with RBI-recognized Self-Regulatory Organizations (SROs), including priority sector on-lending eligibility.

Sectors improving fundamentals reflected in funding and capital position. As of March 31, 2026, MFIN member NBFC-MFIs reported aggregate borrowings outstanding of INR 1,09,106 Crores; total equity increased to INR 36,700 Crores (YoY +6.7%). During 2025-26, sector received debt funding of INR 77,867 Crores, an increase of 30.9% over previous year. Supported by stronger capital positions, diversified funding sources, improving portfolio quality, NBFC-MFIs maintained financial resilience while navigating measured growth environment.

Even within more structured regulatory environment and stronger borrower protection norms, NBFC-MFIs sustained core strengths. Affinity-based lending models, women-centric outreach, disciplined portfolio management reinforced operational stability. Ongoing investments in governance and digital enablement improving credit delivery and strengthening risk management. Increased adoption of digital technologies improved credit underwriting accuracy through greater data availability, more robust borrower profiling, earlier identification of potential stress.

(Source: Micrometer Report, April 2026)

Key Industry Numbers (as of March 31, 2026):

• 3.4 Crore Number of Clients
• INR 1,43,586 Crores Total Loan Amount Outstanding in 2025-26
• INR 1,47,331 Crores Assets Under Management
• INR 60,789 Crores Total Loan Amount Disbursed in 2025-26
• 44.2% Share of Total Loan Portfolio
• INR 77,867 Crores Total Debt Funding Received
• 721 Districts Portfolio Spread

Operating Framework of the Indian Microfinance Sector: Joint Liability Group model remains one of most widely adopted lending approaches. Leveraging collective responsibility; substitutes physical collateral with social capital; mutual trust and peer monitoring mitigate credit risk and instill repayment discipline. Structured and increasingly digitized process: formation of small borrower groups, documentation, orientation and training, robust appraisal comprising digital KYC, credit bureau checks, indebtedness assessment, household verification through handheld devices. Disbursements directly into borrowers bank accounts. Regular Kendra meetings (weekly or fortnightly) review repayment behavior, monitor loan utilization, strengthen group accountability. Integration of digital tools streamlined onboarding and automated repayment tracking. JLG framework evolved beyond credit delivery mechanism to tool for fostering financial participation, livelihood generation, economic upliftment.

Key Industry Priorities and Challenges: Sustaining improvements in asset quality remains key priority. Portfolio quality improved significantly during 2025-26; institutions continue focusing on strengthening underwriting standards, collection efficiencies, portfolio monitoring frameworks. Industry PAR 31-180 days improved to 1.2% as of March 31, 2026 from 3.5% a year earlier.

Balancing growth with borrower sustainability remains critical challenge: industry adopting measured approach to credit deployment amid evolving operating environment. Disbursement activity remained muted amidst cautious lending sentiment, resulting in slower portfolio growth and contraction in overall industry size. As of March 31, 2026, industry gross loan portfolio stood at INR 3,25,174 Crores (YoY moderation of 13.3%); unique borrowers moderated to 6.4 Crores from 7.8 Crores.

Managing borrower indebtedness requires close attention. Rising instances of multiple borrowing and increasing leverage prompted introduction of guardrails for customers with aggregate JLG balances of INR 2 Lakh or more, leading to intensified scrutiny of borrowers with relationships across multiple lenders. Proportion of borrowers associated with three or more lenders moderated; active loan accounts declined from 13.3 Crores as of March 31, 2025 to 10.1 Crores as of March 31, 2026.

Funding conditions turned more selective: liquidity remained adequate but lenders adopted more risk-averse approach, particularly toward smaller institutions. Funding flows skewed towards larger institutions. During 2025-26, MFIN member NBFC-MFIs received debt funding of INR 77,867 Crores (YoY +30.9%); large institutions accounted for approximately 97.8% of total funding received.

Compliance and customer protection expectations intensified: regulatory bodies and industry associations emphasized responsible lending, stronger governance, enhanced customer protection. Increasing adoption of digital processes strengthened transparency and auditability; more than 99% of disbursements by MFIN member NBFC-MFIs conducted through cashless channels as of March 31, 2026.

Growth Drivers:

• Large and still-underpenetrated financial inclusion opportunity: RBIs Financial Inclusion Index rose to 67.0 for year ended March 31, 2025 (up from 64.2); PMJDY beneficiaries reached 55.98 Crores in August 2025. NCAER-MFIN study: dependence on informal borrowing declined from 46% of borrowers in 2011 to nearly 1% among borrowers accessing formal credit today.
• Digital transformation and technology adoption: digital onboarding, analytics-driven underwriting, electronic collections, data-led portfolio monitoring improving operational efficiency, strengthening risk management, enhancing customer experience.
• Extensive operating footprint: distribution network across 721 districts spanning 28 states and 8 union territories, serving 6.4 Crore unique borrowers through 10.1 Crore active loan accounts.
• Greater focus on higher-quality repeat borrowers: shift toward serving existing borrowers with stronger repayment behavior through larger-ticket, better-calibrated loans. Average loan outstanding per account increased to approximately INR 32,177 as of March 31, 2026 from INR 28,174 a year earlier.
• Tighter guardrails can strengthen long-term growth quality: TransUnion CIBIL data indicates moderation in lending to borrowers with multiple credit relationships and to those with JLG balances equal or above INR 1.5 Lakhs.
• Small-ticket credit remains relevant in Indias broader lending landscape: demand for retail and small-ticket loans reflects rising aspirations and deeper credit penetration.
• Re-entry of excluded borrowers represents medium-term opportunity: recent exit of significant number of small borrowers from formal credit system highlights latent demand; gradual re-engagement could make borrower re-formalization important medium-term growth lever. NCAER-MFIN study indicates borrowers reported improvements in income levels, savings behavior, financial security, economic participation.
• Deep rural penetration continues to support long-term relevance: rural areas accounted for approximately 82.4% of MFIN member NBFC-MFI AUM as of March 31, 2026.

Policy Support Driving the Sector - RBI Policy Support:

• Continued Priority Sector Lending (PSL) support for microfinance: bank lending to eligible microfinance institutions including NBFC-MFIs continued under PSL norms. Bank credit to NBFC-MFIs estimated at around INR 1.6-1.8 Lakh Crores for the year.
• Sustained access to bank funding for MFIs: continuation of PSL classification ensured stable and reliable funding base; MFIN member NBFC-MFIs received INR 77,867 Crores of funding during 2025-26 (YoY +30.9%).
• Support for responsible lending and borrower protection: RBI maintained regulatory focus on fair and responsible lending practices including transparent pricing, proper assessment of repayment capacity, board-approved lending policies, ethical recovery mechanisms.
• Indirect support through financial inclusion measures: greater banking penetration and access to formal financial services benefited microfinance sector; more low-income households became part of formal financial system.
• Improved repayment ecosystem through digital and formal banking infrastructure: expansion of digital payments, bank accounts, formal transaction systems made it easier for borrowers to repay loans in structured and transparent manner; improving collection efficiency and reducing reliance on informal cash-based processes.
• Support through financial literacy initiatives: RBI-backed financial literacy programs including Centers for Financial Literacy and targeted awareness efforts in rural areas helped improve borrowers understanding of savings, credit discipline, repayment behavior.

Government Policy Support:

• Continued support through SHG-Bank Linkage model: more than 10 Crore women associated with SHGs (per NABARD); credit outstanding under program exceeded INR 2.8 Lakh Crores.
• Ongoing implementation of DAY-NRLM: key policy platform supporting rural households especially women through financial inclusion, institution building, access to livelihood financing.
• Provision of Revolving Fund (RF) support: eligible SHGs continued receiving RF assistance; improves internal lending capacity of groups; helps members access small credit amounts for stabilizing household spending, coping with emergency needs, supporting income-generating purposes.
• Provision of Community Investment Fund (CIF) support: strengthened financial base of community institutions and SHG federations; improved credit availability at local level; supported livelihood activities.
• Credit Guarantee and MSME Support Mechanisms: continued emphasis on credit guarantee frameworks and MSME-support initiatives strengthened access to formal finance for underserved enterprises and first-time borrowers; reduced perceived credit risk; encouraged broader participation by lending institutions.

Outlook: Outlook for Indian microfinance sector remains positive, underpinned by growing emphasis on responsible growth, stronger credit discipline, accelerating digital transformation. Lenders expected to strengthen underwriting standards, enhance borrower assessment frameworks, adopt more calibrated approach to portfolio expansion. Greater focus on repayment capacity, portfolio diversification, customer-centric lending practices likely to support healthier credit outcomes. Digital transformation continues to emerge as key growth enabler: increased adoption across customer onboarding, loan origination, servicing, collections, risk monitoring improving operational efficiency, enhancing customer experience, expanding access to underserved communities. Growing use of analytics and digital platforms enabling institutions to strengthen portfolio oversight and make more informed lending decisions. Supported by ongoing financial inclusion initiatives, favorable policy frameworks, sectors critical role in extending credit access to underserved segments, Indian microfinance industry well positioned for sustainable growth.

COMPANY OVERVIEW

Satin Creditcare Network Limited (SCNL or the Company), established in 1990, has built a trusted and enduring presence within Indias financial inclusion landscape over a journey spanning more than three decades. Evolved into a leading microfinance institution focused on serving economically active women in rural and semi-urban markets. Designated as NBFC-MFI in 2013. Operates primarily through Joint Liability Group model, extends collateral-free credit to underserved borrowers, leveraging deep rural distribution network, strong customer relationships, technology-enabled operating platform. Alongside core lending, facilitates access to financing for productive and quality-of-life-enhancing products including solar solutions, bicycles, home appliances, sanitation facilities.

Broader operating environment for Indian microfinance sector remained challenging: macroeconomic volatility, localized climate disruptions, asset quality pressure leading to portfolio recalibration across industry, evolving borrower dynamics, constrained funding conditions. Against this backdrop, SCNL demonstrated resilience by maintaining disciplined focus on underwriting, proactive portfolio management, robust collection efforts, continued focus on responsible growth. Following period of elevated industry-wide stress, Company witnessed sustained improvement in portfolio quality metrics during 2025-26, supported by strengthened credit filters, enhanced field-level monitoring, focused collection initiatives. Improvement in PAR trends reflects effectiveness of these measures.

SCNL maintained strong liquidity profile and further reinforced long-term commitment to responsible lending throughout implementation of Guardrails 2.0. Framework complemented existing risk management practices and boosted portfolio stability and credit discipline. To further diversify funding base, Company raised USD 100 Million syndicated social term loan under ECB route in early 2025 and onboarded 9 new lenders during 2025-26, demonstrating continued confidence among domestic and global institutional investors.

Effectiveness of long-standing focus on responsible lending, disciplined execution, prudent risk management reflected in financial and operating performance of 2025-26. Despite challenging industry environment, SCNL concluded year with 19th consecutive profitable quarter and improving business fundamentals. Gradual normalization of credit costs, coupled with calibrated growth strategy, contributed to improved earnings performance; strong liquidity position, comfortable capital adequacy, diversified funding franchise reinforced overall financial resilience. Key strategic development during year: establishment of Satin Growth Alternatives Limited, wholly owned subsidiary and Category II AIF focused on providing debt capital to green and women-led MSMEs; reflects Groups commitment to expanding access to responsible and impact-oriented capital; marks important step in diversification journey.

With improving asset quality, prudent liquidity management, strategic diversification across MSME finance, housing finance, alternative investment funds, Group well positioned for sustained growth. Group also expanded technology and innovation footprint through STL, developing next-generation digital capabilities across enterprise software, AI and cybersecurity, and through strategic investment in QTrino, a deep-tech company specializing in post-quantum security solutions. These initiatives complement Groups financial services platform while creating new avenues for long-term, technology-led growth. SCNL continued to fortify standing within sector. Buoyed by robust rural demand and rising digitization across Indias hinterland, Company strategically positioned to play significant role in sustainable evolution of countrys microfinance sector.

Satin Creditcare Network Limited footprint: 32 States and UTs; >1 Lakh Customers; >577 Districts; 2015 Branches; 34 Lakh Number of Centers; >3.7 Lakh (Note: extracted text includes these numbers; layout suggests: "32 States and UTs, >577 Districts, 1,841 Branches, >3.7 Lakh Customers, >1 Lakh Number of Centers" - however exact mapping is ambiguous in source. I am reporting the extracted text as present: "32 States and UTs >1 Lakh >577 Districts 2015 34 Lakh >3.7 Lakh Branches Customers Number of Centers". The OCR layout is corrupted; this is marked as ambiguous but not random.)

Satin Housing Finance Limited (SHFL): Incorporated April 2017 as wholly owned subsidiary of SCNL; committed to addressing affordable housing finance needs of underserved households across rural and semi-urban India. Provides comprehensive suite of housing finance products: loans for home purchase, construction, extension, renovation, loans against property to support entrepreneurial and livelihood requirements. As of March 31, 2026, expanded presence across 22 states, serving more than 12,000 customers. Strong parentage and governance framework; robust growth trajectory with prudent risk management, strong capital base, diversified funding profile comprising 34 lending relationships including refinance support from National Housing Bank. As of March 31, 2026: AUM INR 1,267 Crores, GNPA 2.95%, Capital Adequacy Ratio 53.79%. During 2025-26 achieved milestone of crossing INR 1,000 Crores AUM. Increasing housing aspirations, improving income formalization, continued policy support for affordable housing provide favorable operating environment. Focused approach toward underserved customer segments; well-positioned to expand access to formal housing finance and support sustainable asset creation at household level.

Satin Finserv Limited (SFL): Wholly owned subsidiary of SCNL, one of Groups key growth engines and rapidly expanding MSME-focused NBFC. Incorporated August 2018, headquartered in Gurugram, Haryana. Provides tailored financing solutions to MSMEs across India through Micro Enterprises Group and Sustainable & Emerging Businesses segments. Serves diverse customer base: traders, retailers, wholesalers, manufacturers, service providers, self-employed professionals, educational institutions, agri-businesses, emerging enterprises. As of March 31, 2026: AUM INR 1,054 Crores (robust growth of 92% during year), disbursements increased by 120%, driven by strong momentum across MEG and SEB segments. Expanded footprint to 121 branches across 14 states. Portfolio quality improved with GNPA declining to 3.80%; CRAR 29.55% reflected strong capital position and prudent risk management framework. Onboarded 13 new lenders; total lender count 31; diversified funding profile across banks, financial institutions and impact investors. Supported by strong parentage, secured lending model, diversified funding access, well-capitalised balance sheet; well positioned to capitalize on significant opportunity within Indias MSME sector. Crossed INR 1,000 Crores AUM milestone; evolved into meaningful growth driver for Group.

Satin Technologies Limited (STL): Wholly owned subsidiary of SCNL, incorporated August 2024 as dedicated platform to drive technology-led transformation across Group. Focused primarily on financial services sector; developing robust digital platforms to improve operational efficiency, support scalability, elevate customer experience. Initial deployments include Human Resource Management System and Loan Management Platform for SCNL. Building capabilities in advanced and emerging technologies. In January 2026, acquired 51% stake in QTrino Labs, deep-tech cybersecurity firm specializing in post-quantum cryptography. SCNL carried out capital infusion via rights issue in early 2026 to support STLs growth and technology integration. STL expanded global presence with representative offices in Toronto and Dubai to serve North American and Middle Eastern markets.

Satin Growth Alternatives Limited (SGAL): Incorporated as public limited company on August 27, 2025; strategic extension of SCNLs approach to inclusive and impact-driven financing. Established as Category II AIF; differentiated platform with all-women leadership structure spanning Board and investment team. Focused on addressing unmet financing needs of MSMEs with particular focus on green businesses and women-led enterprises. Built on strong ESG principles; aims to support last-mile financial inclusion by providing scalable capital to livelihood-oriented sectors often underserved by traditional funding channels. Received SEBI license and signed MoU with SBI. Through SGAL, Group extending role beyond microfinance into broader capital ecosystem, leveraging gender-intentional leadership and targeted investments to support sustainable development and unlock long-term value across underpenetrated rural markets.

Solutions We Offer:

Product	Loan Size (in INR)	Loan Tenure (in Months)
Income Generating Loans	10,000–1,25,000	12–48
Water and Sanitation (WASH)	10,000–45,000	12–24
MSME Loan	1,00,000–15,00,000	Max. 120
Lending to Corporate Institutions	1,00,000–10,00,000	Max. 36

Social Impact Financing:

Product	Loan Size (INR)	Tenure (Months)
Consumer and Electronics	10,000–52,000	12–24
Cycle	5,500–12,000	12
Inverter and Battery	17,999–23,300	18–24
Mobile	11,499–21,499	12–24

Product Range of Our Subsidiaries - Satin Housing Finance Limited (SHFL): Caters to diverse housing needs through loans for home purchase, construction, renovation, expansion.

Features	Urban Home Loan	Micro Home Loan
Loan Range (INR)	INR 5,00,000–40,00,000*	INR 1,00,000–7,00,000*
Repayment Time Period	Maximum loan tenure of 20 years*	Maximum loan tenure of 7 years*
Rate of Interest	Competitive ROI**	Competitive ROI**

*May vary on case basis. Company offers diversified range of lending products, with rate of interest ranging from 9% to 25% depending on nature of offering.

Company provides loans against property - effective financing solution for urban business requirements and micro home loan needs.

Features	Urban Business Loan	Micro Business Loan
Loan Range (INR)	INR 5,00,000–25,00,000*	INR 1,00,000–7,00,000*
Repayment Time Period	Maximum loan tenure of 15 years*	Maximum loan tenure of 7 years*
Rate of Interest	Competitive ROI**	Competitive ROI**

*May vary on case basis. Rate of interest ranges from 9% to 25% across SHFLs various products.

Satin Finserv Limited (SFL) - Micro Enterprise Group (MEG) Segment:

• Loan Amount: INR 85,000 to INR 1 Crores
• Tailored Tenor Options: up to 60 months
• Lending Philosophy: branch-led model, physical touchpoint with customers
• Age: business owners aged 21 to 60 years
• Minimal Documentation: quick and seamless disbursal
• Focus Segments: semi-urban and rural areas

Sustainable and Emerging Businesses (SEB) Segment:

• Loan Amount: up to INR 20 Crores
• Tailored Tenor Options: up to 60 months
• Lending Philosophy: structured and secured lending approach, quick and reliable access to growth capital
• Focus Segments: MSME sectors across manufacturing, processing, service industries, with strong focus on sustainable segments including EVs, Solar, Battery Energy storage

Satin Technologies Limited (STL):

Offerings	Features
Satin Loan Management Solution	IRIS-based Onboarding and Approvals; Accounting and Financial Management; Mobile Collections for Field Agents; Data-driven Insights; Real-time Repayment Tracking
Core Banking Solution	Account Management; Field Agent Tracking; Transaction Handling; Loan Management; CRM Insights; Deposit Tracking; Financial Accuracy; Payment Processing; Real-time Analytics; Asset Optimization
Talent Management Solution	Talent Acquisition Management; Onboarding and Exit Management; Leave and Attendance Management; Payroll; Alumni Network Platform

Key Strengths at SCNL:

• Proven Track Record of Operational Resilience and Credit Cycle Management
• Comprehensive and Impactful Product Portfolio Supporting Inclusive Growth
• Diversified Geographic Presence with Extensive Rural and Semi-Urban Reach
• Technology-driven Transformation and Strong Digital Capabilities
• Prudent Underwriting and Comprehensive Risk Management Framework
• Experienced Leadership with Strong Governance Oversight

Please read more on page 16 for further updates.

Key Developments in 2025-26:

• Recorded 14% growth in AUM to reach INR 12,853 Crores in 2025-26 vs INR 11,316 Crores in 2024-25; registered healthy 14% YoY growth in disbursements to attain INR 11,202 Crores
• Added ~7.4 Lakh clients, taking total client base to ~33 Lakhs as of March 31, 2026
• Achieved PAR 1 of 3.72% and PAR 90 of 3.12% as of March 31, 2026 vs 4.92% and 3.70% respectively as of March 31, 2025
• Recovered INR 38 Crores in collections against write-off pool
• Raised INR 10,826 Crores during the year with 40% YoY growth from diversified lender base including banks, financial institutions, international lenders
• Maintained CRAR of 25.39%
• Completed 19 consecutive profitable quarters by end of 2025-26

Funding Profile: SCNLs funding profile reflects conscious strategy of diversification and balance across instruments, lender categories, funding sources, strengthening funding resilience and reducing concentration risk. During 2025-26, mobilized INR 10,826 Crores. Funding mix: term loans and PTCs 52.0% of total borrowings; direct assignments 22.6%; NCDs 10.3%; ECBs 14.9%; Commercial Papers 0.2%. Diversified funding strategy contributed to improved borrowing efficiency; marginal cost of borrowing declined by 43 basis points YoY to 10.82% during 2025-26 from 11.25% in 2024-25.

Across lender categories: banks 70.1% share; overseas funds 13.7%; NBFCs 4.8%; domestic financial institutions 11.4%. Highlights ability to access multiple funding channels. Strategic lender expansion: onboarding of new lender relationships; strengthening partnerships across banks, foreign institutions, small finance banks.

Product-wise (in %) - pie chart: Term Loan & PTC 52.0%; DA 22.6%; NCD 10.3%; ECB 14.9%; Commercial Papers 0.2%.

Lender-wise (in %) - pie chart: Banks 70.1%; Overseas Funds 13.7%; NBFC 4.8%; Domestic Financial Institutions 11.4%.

Financial Overview: SCNLs financial performance during 2025-26 reflects resilience of operating model and strengthening of key strategic pillars. Standalone revenue increased by 19% YoY to INR 2,802 Crores; PAT rose by 39% to INR 302 Crores. Strengthened earnings profile supported by moderation in credit costs to 3.82%. Return on Assets (RoA) 2.51%; Net Interest Margin (NIM) 13.62%. Operating Expense Ratio 6.54%; Return on Equity (RoE) 10.12%. Net worth increased to INR 3,103 Crores as of March 31, 2026.

FY 2025-26: Company further strengthened human capital ecosystem through focused investments in talent acquisition, capability development, leadership enhancement, employee well-being, workplace inclusion.

Key Financial Ratios:

Particulars	March 31, 2026	March 31, 2025
Gross Yield	23.37%	21.70%
Financial Cost Ratio	9.76%	8.67%
Net Interest Margin	13.62%	13.03%
Operating Expenses Ratio	6.54%	6.31%
Loan Loss Ratio	3.82%	4.59%
RoA	2.51%	2.07%
RoE	10.12%	7.86%
Leverage (Total Debt/Total Net Worth)	3.07 times	2.77 times
Cost to Income Ratio	47.99%	48.41%

Definitions:

• Gross Yield: earning capacity of loan portfolio and pricing power; higher yield may reflect better risk-based pricing but could signal exposure to riskier borrower segments.
• Financial Cost Ratio: cost of funds; lower cost reflects better credit rating, access to cheaper funding, efficient liability management.
• Net Interest Margin: core profitability of lending operations; how effectively institution converts borrowing into earnings.
• Operating Expenses Ratio: operational efficiency and scalability; lower ratios indicate better cost control.
• Loan Loss Ratio: asset quality and credit risk management; rising ratio signals deterioration in borrower repayment behavior.
• Return on Assets (RoA): how efficiently company uses asset base to generate profits.
• Return on Equity (RoE): shareholder value creation and effectiveness of capital utilization.
• Adjusted Cost-to-Income Ratio: clean measure of core operational efficiency by removing one-off distortions.

As organization expanded operations and capabilities, adopted strategic approach to workforce planning. Enhanced onboarding framework through digital learning journeys enabling faster integration, improved engagement, accelerated productivity among new hires. Expanded utilization of Learning Management System (LMS): self-paced learning modules, virtual instructor-led programmes, compliance training, functional and behavioral development interventions.

Significant milestone: launch of SCNL Leadership Development Academy. Introduced structured Manager-as-Coach programs. High-Potential (Hi-Po) Development Program identified and developed emerging leaders through leadership assessments, senior leadership mentoring, cross-functional exposure, personalized development plans.

Committed to inclusive and equitable workplace: women-focused hiring initiatives, gender-neutral people policies, flexible work arrangements, wellness support. Employee well-being reinforced through health and wellness programs, awareness initiatives, employee engagement activities, regular feedback mechanisms.

Performance management framework reinforced culture of accountability, meritocracy, continuous improvement by aligning individual goals with organizational objectives and integrating performance outcomes with learning opportunities, career progression, recognition. Employee engagement strengthened through performance-linked rewards, spot recognition programs, milestone awards, transparent grievance and feedback channels.

16,212 Total Permanent Employees; 28 Years Average Age; 80% Retention Rate

Initiatives contributed to engaged, capable, resilient workforce; earned recognitions including Great Place to Work certification, HR Transformation Award at India HR Summit, People Excellence Award at BT-BFSI Awards.

Metric	Value
Total Permanent Employees	16,212
Average Age	28 Years
Retention Rate	80%

Digital Transformation and Technology Enablement: Technology architecture, developed and managed through in-house technology capabilities, supports critical business functions across credit, operations, collections, portfolio management. During 2025-26, strengthened intellectual capital through advanced analytics, digital innovation, robust risk management practices, continuous capability building. Enhanced analytics-driven underwriting and scorecard-based lending framework leveraging bureau insights, customer demographics, repayment behavior, portfolio performance trends to improve borrower profiling, risk segmentation, credit decision-making. Supported by centralized underwriting processes, technology-enabled loan origination systems, real-time portfolio monitoring mechanisms; strengthened portfolio quality, improved risk-adjusted returns, enhanced ability to proactively identify and mitigate emerging risks. Through Satin Technologies Limited, continued accelerating digital transformation by deploying secure technology platforms, automated workflows, integrated loan management systems improving operational efficiency, strengthening data security, enhancing customer experience.

Alongside technology and analytics, strengthened organizational knowledge and future-ready capabilities through investments in digital learning platforms, specialized training programs, cross-functional knowledge-sharing forums. Reinforced governance and compliance framework through risk-based audits, system-driven controls, continuous monitoring mechanisms, regular compliance reviews.

Please read more on Companys Intellectual Capital on Page no. 78 of this Integrated Report.

Internal Control and Adequacy: Robustness of internal financial control and risk management framework commensurate with scale and complexity of operations. Control ecosystem structured to support orderly conduct of business, protect assets, ensure adherence to internal policies, maintain accuracy and reliability of financial reporting. Governance oversight led by Audit Committee of the Board, regularly reviewing internal audit findings, key observations, compliance status, prioritizing accountability and financial integrity. Risk-based internal audit mechanism driven by in-house Internal Audit function enables extensive scrutiny of critical and high-exposure areas. Company continues strengthening technology and security architecture through end-to-end computerization, cloud-based systems, advanced cybersecurity controls, supported by ISO 27001:2022 certification. Enhanced control environment through greater use of technology-enabled monitoring, process automation, data-driven audit reviews. Centralized Shared Services Center further fortifies control processes through verification of loan applications and KYC documentation, improving onboarding quality, mitigating customer selection risk, supporting regulatory compliance.

Risk Management: Risk management core element of strategic and operational framework. Given focus on financially underserved and economically vulnerable segments, sound risk oversight critical to protecting portfolio quality, ensuring long-term sustainability, safeguarding stakeholder interests. Enhanced comprehensive enterprise-wide risk framework strengthening ability to identify, assess, monitor, mitigate risks across credit, operational, compliance, reputational, market segments. Framework supported by well-defined policies, control mechanisms, analytics, technology platforms, under supervision of Board-level Risk Management Committee. Contextual and multi-dimensional approach to portfolio risk assessment incorporating borrower profiles, product features, credit behavior, repayment history, relationship tenure, future income potential, indebtedness levels, prevailing market conditions. Regular risk audits, stress testing exercises, portfolio reviews, early warning systems provide timely insights and facilitate proactive corrective action. During year, further strengthened risk management architecture through analytics-driven and technology-enabled control mechanisms enabling more granular risk identification and proactive portfolio management.

Please read more on Companys risk mitigation strategies on page no. 64 of this Integrated Report.

Corporate Governance: Sound governance framework supports responsible growth, strategic decision-making, long-term value creation. Transparency, accountability, ethical business conduct embedded within framework, led by experienced and diverse Board of Directors. Ensures disciplined adherence to regulatory requirements; fosters culture of integrity and responsible oversight. Facilitates compliance with internal policies across critical areas such as income recognition, asset classification, provisioning, dividend distribution. Follows three-lines-of-defense model strengthening controls, compliance, risk management. Zero-tolerance approach toward misconduct, fraud, corruption. Technology-enabled governance systems augment efficacy of monitoring, control, compliance mechanisms. Robust track record: zero material non-compliance since inception; no requirement of incremental provisions under new Labor Codes. Full-scale transparency in loan disclosures boosts stakeholder confidence and drives responsible lending practices. Governance framework supported by active Board oversight and specialized committees: Audit Committee, Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility and ESG Committee.

Please read more on Companys governance section on Page no. 58 of this Integrated Report.

RBI: Compliance: SCNL operates as Systemically Important Non-Deposit taking NBFC - Middle Layer. Under RBIs Scale-Based Regulatory Framework introduced through Master Direction on NBFC-Scale Based Regulation, 2023, Company falls within Middle Layer category. Follows consolidated, risk-based regulatory structure applicable to its scale and nature of operations. Adheres to all key RBI requirements related to qualifying assets, asset classification and provisioning, credit pricing, capital adequacy, liquidity management, safeguards around multiple lending and borrower over-indebtedness. Aligns practices with RBIs principles of fair practices and responsible lending. As of March 31, 2026, Liquidity Coverage Ratio 135.55% (March 31, 2025: 130.40%), well above regulatory minimum.

Corporate Social Responsibility (CSR): CSR commitment to uplift lives, empower underserved communities, propel inclusive, sustainable development. Aligns with Schedule VII of Companies Act, 2013; structured CSR policy focuses on community welfare, social development, environmental responsibility. Works through strategic partnerships with credible trusts and foundations. Collaborating with GNA University since 2021-22 to support education for underprivileged children. During 2025-26, contributed INR 100 Lakh to GNA University for scholarships for economically disadvantaged students. Partnered with Hardicon Social Foundation, contributed INR 215.38 Lakhs toward women empowerment program across Uttar Pradesh, Haryana, Odisha - distributing 1,000 sewing machines to women from economically weaker sections; skill-based training sessions covering tailoring techniques and basic entrepreneurship. Deepened engagement with local communities through financial literacy and awareness programs. In collaboration with MFIN (SRO for microfinance sector), conducted 55 financial literacy workshops across multiple states; focused on budgeting, savings, prudent borrowing, fundamentals of investing; positively impacted approximately 2,750 clients.

Detailed information in Social and Relationship Capital section on page 88 of this Annual Report.