Mufin Green Finance Limited shifts 44% AUM to digital loans

Mufin Green Finance Limited had Rs 777.07 crore, or 44.0% of its Rs 1,766.07 crore gross assets under management (AUM), in Mediclaim financing and Salary Saathi loans at 30 September 2026. MGFL says repayments from climate financing are being redeployed into these digitally originated, short-tenor products, which use policy-refund adjustment or payroll-deduction recovery mechanisms.

How has MGFL’s AUM mix changed?

MGFL’s Mediclaim financing and Salary Saathi verticals represented 44.0% of AUM in September 2026, compared with 41.1% in March 2026 and 45.6% in June 2026. Mediclaim financing was the larger of the two at Rs 686.90 crore, or 38.9% of total AUM, while Salary Saathi reached Rs 90.61 crore, or 5.1%. The combined digital-products book was Rs 777.07 crore.

The clearest portfolio change was in climate financing, whose AUM declined from Rs 459 crore in March 2026 to Rs 338 crore in September 2026. Its AUM share fell from 29.8% to 19.1% over the same period. MGFL attributes the rebalancing to repayments from the climate-financing book being deployed into Mediclaim financing and Salary Saathi.

Mediclaim financing increased from Rs 608 crore in March 2026 to Rs 687 crore in September 2026, although it rose by Rs 10 crore from June 2026. Salary Saathi rose from Rs 26 crore in March to Rs 91 crore in September, and MGFL describes this as 3.4 times AUM growth since March. MSME, Corporate & Other Loans also increased, from Rs 448 crore to Rs 651 crore, and accounted for 36.9% of September AUM.

Why are Mediclaim financing and Salary Saathi digitally originated products?

MGFL says its digital lending model places credit at an insurer’s checkout or through an employer’s payroll, rather than relying on branches, direct-selling agents or field staff. The company reports integrations with more than 10 insurers and uses government payroll channels for Salary Saathi. Its underwriting uses verified insurance-policy, payroll and credit-history data instead of manual paper appraisal.

For Mediclaim financing, MGFL funds health-insurance premiums and says the insurer receives the full premium on day one. Mediclaim AUM stood at Rs 686.90 crore in September 2026, and MGFL disbursed 45,178 Mediclaim loans in Q2 FY27. Loan tenures range from two to 60 months.

Salary Saathi is a payroll-linked loan product for government employees, with instalments deducted at source from salary, according to MGFL. The business disbursed Rs 65.79 crore in Q2 FY27 and was live in Rajasthan and Assam at September 2026. MGFL identifies payroll deduction as the recovery mechanism and describes contract workers under project Arthum as its next channel.

MGFL also identifies policy-refund adjustment as a recovery feature for Mediclaim financing, while Salary Saathi uses payroll deduction. The company says collections are fully digital and credit can be provided on the same day. Funds are paid only to the insurer or the borrower’s account, according to the presentation.

What does the September 2026 portfolio say about growth and profitability?

MGFL reported gross AUM of Rs 1,766.07 crore in September 2026, up 10.4% quarter on quarter from Rs 1,599.23 crore in June 2026 and 71.8% year on year from Rs 1,028 crore in September 2025. Quarterly disbursements increased to Rs 590.51 crore in Q2 FY27 from Rs 449.40 crore in Q1 FY27.

Profit before tax rose to Rs 19.47 crore in Q2 FY27 from Rs 18.82 crore in Q1 FY27. Profit after tax was Rs 15.06 crore, up 148.5% year on year from Rs 6.06 crore in Q2 FY26. Net interest income, however, was Rs 33.27 crore in Q2 FY27, below Rs 35.16 crore in the preceding quarter.

Asset-quality ratios improved between Q1 and Q2 FY27. Gross non-performing assets, or GNPA, declined to 1.77% from 1.91%, while net non-performing assets, or NNPA, declined to 1.50% from 1.63%. The capital-to-risk-weighted-assets ratio, or CRAR, was 27.73% in Q2 FY27, compared with 30.55% in Q1 FY27.

What operating scale and funding indicators does MGFL report?

MGFL reported Rs 5.77 crore of AUM per employee in September 2026, up from Rs 4.36 crore in June 2026. The company had 306 employees, compared with its FY27 target of 300. It attributes the productivity measure to a model without a field force, supported by insurer integrations and state payroll memorandums of understanding.

The cost of borrowings was 11.96% in September 2026, down from 13.12% in September 2025. MGFL’s presentation lists management’s path to a cost of funds below 10.5% by March 2027, but this is an outlook rather than a reported result. The September 2026 CRAR of 27.73% was 2.82 percentage points below the 30.55% reported for Q1 FY27.

From June to September 2026, Salary Saathi AUM increased from Rs 53 crore to Rs 91 crore and MSME, Corporate & Other Loans increased from Rs 459 crore to Rs 651 crore. Over the same quarter, climate financing declined from Rs 411 crore to Rs 338 crore, while Mediclaim financing rose from Rs 677 crore to Rs 687 crore. The figures show that the reduced climate-financing allocation coincided with growth in other portfolio verticals.

Conclusion

MGFL’s September 2026 mix shows a material move toward embedded insurance-premium and payroll-linked lending while climate financing represented 19.1% of AUM, down from 29.8% in March 2026. Total gross AUM nevertheless rose 71.8% year on year to Rs 1,766.07 crore, alongside Q2 FY27 disbursements of Rs 590.51 crore.

The next disclosed items to watch are management’s path to a cost of funds below 10.5% by March 2027 and the planned contract-workforce channel under project Arthum. MGFL also reported Salary Saathi in Rajasthan and Assam at September 2026, while the Q2 FY27 GNPA and NNPA figures were 1.77% and 1.50%, respectively.