With a restructured business model featuring three distinct verticals—prime, emerging markets, and affordable housing (Roshni)—PNBHF is now targeting high-yield, underpenetrated segments such as self-employed and informal-income borrowers.
As the company doubles down on its branch-led expansion, tech-enabled underwriting, and digitised loan journeys, it is also witnessing strong traction in disbursements and profitability.
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In an exclusive interview with Fortune India, Kousgi speaks about the cultural reset, scalable underwriting models, the launch of the LAP product, and the company’s FY26 growth roadmap built on both conviction and control.
PNBHF has now carved out three distinct verticals. What drove this segmentation strategy? How do the economics and underwriting logic vary across each?
We restructured our retail business into three verticals to better serve India’s diverse borrower base. The prime vertical caters to salaried and self-employed borrowers with traditional credit profiles. In contrast, the emerging and affordable segments target self-employed and informal-income customers in semi-urban and lower-income geographies with need-based solutions and flexible underwriting.
Each vertical is backed by customised credit models, tech-enabled tools, and dedicated teams, allowing for efficient, scalable, and responsible lending. This segmentation has broadened market reach, strengthened regional ecosystems, and improved yields. PNBHF achieved 18.2% retail loan growth in FY25, exceeding its target, and reached a loan portfolio worth ₹75,000 crore. By combining risk-calibrated underwriting with deep customer insight, the company is building a resilient, inclusive portfolio designed for sustainable long-term growth across India’s evolving credit demand segments.
There’s a renewed focus on self-employed and informal-income borrowers at PNBHF, a segment many lenders remain cautious about. What gives you the conviction that this market is scalable and sustainable?
This conviction stems from its massive untapped potential and the robust infrastructure built to serve it responsibly. Though this segment contributes over half of India’s GDP, it holds a minimal share in the formal mortgage market—a gap we aim to bridge. The company uses a multi-tiered underwriting model: bureau-rich profiles go through straight-through processing, while borrowers with limited documentation are assessed via surrogate frameworks using GST data, banking behaviour, and in-person cash-flow evaluations.
This structure balances agility with risk discipline, enabling credit access without compromising portfolio quality. Despite slightly higher credit costs, stronger yields and tech-led sourcing keep unit economics attractive. As of March 2025, around 40% of affordable loans were to self-employed customers, with a 2.55% RoA and 29.38% CRAR. This is not a short-term pivot, but a long-term strategy to lead India’s next wave of inclusive, scalable credit growth.
The LAP product launched by PNBHF this year marks a new vector in your retail play. What role does this product play in the larger portfolio? How is it being tailored for small businesses and the self-employed?
Our underwriting for the self-employed segment moves beyond traditional documentation, focusing instead on contextual and data-backed assessments. In the emerging markets vertical, where around 30% of borrowers are self-employed, we use surrogate models based on GST data, bank statements, and digital cash-flow analysis. For bureau-rich profiles, we enable straight-through processing with fast approvals, while nuanced cases are evaluated using hybrid models combining tech tools and on-ground insights.
Technology is central to this process. We’ve integrated APIs, deployed machine learning for early warning signals, and automated backend operations through RPA. Our AI-enhanced scorecards help balance risk and returns effectively. Despite serving complex segments, 84% of our new business is from customers with credit scores of 700+, and our GNPA remains low at 1.08% (as of March 2025). This approach proves that inclusion and risk discipline can go hand in hand in India’s evolving borrower ecosystem.
From a business that was under stress two years ago to one being actively re-rated by the market, what were the cultural or institutional shifts that made this transformation real and lasting?
Our transformation over the past two years has been rooted in a deep cultural and institutional shift. Moving beyond legacy perceptions, the company embraced a performance-driven, agile, and ownership-led culture, backed by strong execution and empathy. Cross-functional collaboration, sharper KPIs, and customer-centricity are now embedded in daily operations.
This cultural reset enabled a strategic business model overhaul. The prime portfolio now accounts for around 75% of loan assets, while high-yielding emerging markets and Roshni segments contribute 25% and 36% of FY25 retail disbursements, respectively. Asset quality has dramatically improved, with GNPA dropping to 1.08% (March 2025) from 8.13% (March 2022), thanks to smarter credit filters, early warning systems, and tech-empowered collections.
Operationally, we focussed on quality over scale, digitising origination and collections, and building CRM-led engagement. This is not just a recovery—it’s a reinvention, positioning us as a modern, tech-led, high-quality retail lender with long-term growth conviction.
What does your growth roadmap look like for FY26?
We enter FY26 on the back of a strong FY25, having achieved ₹21,972 crore in disbursals with 25% YoY growth. The focus now shifts from headline growth to deepening strategic execution, especially in high-yielding, underpenetrated segments. The emerging markets and affordable housing verticals–currently 25% of the loan book- are expected to scale to around 40% over two years. The non-housing loan portfolio, particularly the loan against property, will also see expansion.
Growth will be driven by India’s aspirational borrowers, supported by robust risk frameworks and branch-led distribution. We are also expanding in tier-II and -III towns and regions like the northeast and Punjab.
Digitisation remains key, with 90% of the digital stack modernised. FY26 targets include 18% retail growth and 25-26% disbursement growth. Backed by strong capital, the company aims to strengthen its identity as a tech-enabled, purpose-driven housing finance leader.
