Arman Financial Services Ltd

I think management has explained this point in the concall- MFIN is becoming a high credit cost industry, but at the same time, ROAs and ROEs compensate them for the risk they are taking.

My sense is, in the past we have seen cycles like 2011-2016 with no credit events or 2003-08. If Macro remains strong, good credit cycle for lenders can continue. There is no high stress or systemic risk at the moment anywhere. Wholesale lenders are still seeing write backs

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Thanks for the reply. Yes that I know higher credit cost is in fact compensated by higher yield, but was unsure of the part of credit cycle we are in. Thanks for sharing your view.

Arman concall is very insightful. One thing that I picked up from the concall was that Mfi lending is become a sort of buyers market now. Ie; Too many lenders approaching the same customer. This can lead to delinquencies and Mr. Patel also alluded to rise in credit cost.
This was confirmed in scuttlebut ( mfi division of a bank) . They were saying that they are facing repayment pressure , due to wrong selling , going down the quality curve due to higher supply.

Other wise Arman looks to be a good candidate to invest.

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