Fusion Finance plans to reduce its dependence on microfinance and build a more diversified lending portfolio, with individual loans emerging as the next key growth driver.The company currently derives around 88 per cent of its portfolio from microfinance, while MSME loans account for about 12 per cent of AUM.Over the next 2.5 years, Fusion expects the MFI share to decline to about 70 per cent with MSME contributing nearly 20 per cent and individual loans accounting for the remaining 10 per cent.Fusion plans to launch its individual loan product from September, subject to the rollout plan.Sanjay Garyali, MD & CEO, Fusion Finance said the new product will comprise unsecured, non-joint liability group (JLG) loans, primarily targeting customers with annual incomes above ₹3 lakh.The average ticket size is expected to be ₹1.25-1.5 lakh, with a maximum loan size of ₹2 lakh, he said.“The diversification strategy is centred around three customer segments. Customers earning below ₹3 lakh will continue to be served through the MFI business, while those earning above ₹3 lakh can be addressed through secured and unsecured individual products,” he said.The third segment comprises MSME borrowers, where lending is currently entirely secured, he added.Fusion’s MSME portfolio is focused largely on shopkeepers and retail businesses, with loans backed primarily by self-occupied residential or commercial properties.In Q1, the company registered a write back of Rs 21 crore from provision made for doubtful loans and expects this to continue in coming quarters. The same for previous two quarters were Rs 20 crore and Rs 18 crore.The company remains confident of achieving its ₹10,000 crore AUM target in FY27, supported by tighter underwriting, improved collection efficiency and technology-led productivity gains.For FY27, Fusion has identified four key operating and financial priorities: achieving a 4 per cent return on assets (ROA) by the fourth quarter, bringing credit costs down to 2 per cent, maintaining collection efficiency at 99.75 per cent and reaching ₹10,000 crore in AUM.Published on August 11, 2026