In 2017, ESAF Microfinance, a non-banking finance company and microfinance institution, transformed into a small finance bank. It focuses on expanding the banking horizon to new unbanked/underbanked areas, yet it stands as a bank for all with a presence in urban, semi-urban, rural, and rural unbanked areas.
ESAF has adopted a unique social business strategy, with a triple bottom line approach, emphasizing People, Planet, and Prosperity. For every rupee invested in ESAF, studies by international agencies revealed that the Social Return on Investment stood at Rs. 3.19.
ESAF is committed to fostering a positive impact in society and the community. Its services are designed to effectively promote financial inclusion throughout the community
Latest News on ESAF Bank
Karthikeyan Manickam takes over as Chairman of ESAF Small Finance Bank
ESAF Small Finance Bank has appointed Karthikeyan Manickam as its new Chairman. With over 36 years of experience in public sector banking, Karthikeyan brings a wealth of expertise to the role. He previously served as Executive Director of Bank of India, where he was part of the top management team and played a key role in shaping policies and strategies across various portfolios. His areas of expertise include banking operations, risk management, regulatory compliance, human resources management, and financial inclusion.
As Chairman of ESAF Small Finance Bank, Karthikeyan will provide strategic guidance and independent oversight to the Board. His primary focus will be on promoting inclusive banking, improving asset quality, ensuring regulatory compliance, and driving sustainable growth. He will also prioritize delivering high standards of customer service, which will help to reinforce stakeholder confidence in the Bank.
Karthikeyan’s experience in public sector banking is extensive, having held senior leadership positions at Indian Bank and served on the boards of several other financial institutions, including Tamil Nadu Grama Bank and BOI STAR Investment Managers Pvt. Ltd. He was also the Chairman of Star Union Dai-ichi Life Insurance Company Limited (SUD Life). His expertise in risk management, credit monitoring, and recovery will be particularly valuable to ESAF Small Finance Bank as it navigates an increasingly dynamic financial environment.
The appointment of Karthikeyan as Chairman is expected to support the Bank’s continued growth and development. His leadership will help to drive the Bank’s mission of promoting financial inclusion and delivering high-quality customer service. With his extensive experience and expertise, Karthikeyan is well-positioned to guide the Bank towards achieving its strategic objectives and reinforcing its position in the financial services sector. Overall, the appointment of Karthikeyan as Chairman of ESAF Small Finance Bank is a significant development that is expected to have a positive impact on the Bank’s future growth and success.
Topsoe and Carbon Neutral Fuels collaborate to drive development of sustainable aviation fuel (eSAF) through innovative technological solutions.
Topsoe, a Danish electrolyser firm, has partnered with UK-based Carbon Neutral Fuels to advance the production of sustainable synthetic aviation fuel (eSAF) using solid oxide electrolyser cell (SOEC) technology. The partnership will see Topsoe deliver 120MW of green power to Carbon Neutral Fuels’ Project Starling in Workington, UK, marking the first commercial application of Topsoe’s SOEC technology for eSAF production. The plant is expected to produce 25,000 metric tonnes of e-SAF per year, with construction planned for 2028 and operations expected to begin in 2031, pending a final investment decision.
The project was awarded the largest e-fuels grant from the UK Government’s third Advanced Fuels Fund in July 2025. The partnership aims to reduce lifecycle emissions by 89% compared to fossil jet fuel, making a significant contribution to the UK’s climate targets. The electrolyser stacks for the project will be delivered from Topsoe’s SOEC manufacturing facility in Denmark, with first deliveries expected in 2028.
The Starling project is currently in the Front-End Engineering Design (FEED) stage, and once operational, it will be a significant step towards decarbonizing the aviation industry. The project’s success is also expected to pave the way for the development of a commercial-scale eSAF market. The UK government has confirmed that its revenue certainty mechanism for SAF will be funded through a levy on aviation fuel suppliers, providing a crucial funding mechanism for the industry.
The partnership between Topsoe and Carbon Neutral Fuels is a significant development in the eSAF market, which has been gaining momentum in recent years. The European Commission has announced a €2.9 billion investment in sustainable fuels by 2027, and companies such as Finnish technology firm Liquid Sun are launching pilot plants to produce eSAF. However, the funding of SAF production remains a challenge, with competitive pricing being a precondition for scale. The UK government’s revenue certainty mechanism is expected to provide a boost to the industry, enabling companies to develop commercial-scale eSAF production facilities.
Plug Power to provide electrolyzers for eco-friendly SAF and diesel production in Uzbekistan, as reported by UzDaily.uz
Plug Power Inc., a global leader in integrated hydrogen solutions, has signed a binding supply agreement with Allied Biofuels FE LLC (ABF) to deliver up to 2 GW of GenEco PEM electrolyzer systems. The agreement supports ABF’s development of sustainable aviation fuel (SAF), electro-synthetic SAF (eSAF), and “green” diesel in Uzbekistan. The final investment decision is expected in the fourth quarter of 2026. This contract raises Plug Power’s total contracted electrolyzer capacity with partners to 5 GW across two large-scale projects, including a previously announced collaboration with Allied Green Ammonia (AGA) in Australia for 3 GW.
The agreement was signed during a visit by Plug CEO Andy Marsh to Australia, where he met with project developers and energy partners to explore additional opportunities in hydrogen and liquid fuel. This contract is one of the largest announced in 2025 for electrolyzer supply, highlighting Plug’s growing role in advancing large-scale renewable fuel production in Central Asia. According to Andy Marsh, “This agreement demonstrates that Plug is executing projects that others are only planning. We are turning hydrogen commitments into real, multi-gigawatt operational projects.”
The partnership with Plug enables ABF to achieve the necessary scale, reliability, and performance to meet global demand for low-carbon fuel, marking a key milestone toward the final investment decision. Allied Biofuels Chairman Alfred Benedict emphasized the importance of this partnership in supporting the global transition to clean energy, reducing emissions in aviation and transport, and ensuring long-term energy sustainability and climate security.
Plug Power’s expanding presence in the Asia-Pacific region and Central Asia strengthens its position as a leading supplier of electrolyzers for renewable fuel and hydrogen energy projects. The company is actively promoting hydrogen and fuel cell technology adoption in South Korea, India, and Japan, supporting the integration of clean hydrogen into power generation, fuel synthesis, and industrial processes. With a fully integrated ecosystem covering production, storage, transportation, and energy generation, Plug Power is building a global hydrogen economy, providing electrolyzers, liquid hydrogen, fuel cells, storage tanks, and refueling infrastructure to industrial and energy enterprises.
Across five continents, Plug has deployed over 72,000 fuel cell systems and 275 refueling stations, supporting large-scale hydrogen projects, including production of up to 40 tons of hydrogen per day at facilities in Georgia, Tennessee, and Louisiana. Clients include major companies such as Walmart, Amazon, Home Depot, BMW, and BP. The company’s technologies will be deployed at ABF’s flagship facility in Uzbekistan, a strategically important site for supplying global sustainable fuel markets. Overall, the agreement demonstrates Plug Power’s commitment to advancing the global hydrogen economy and supporting the transition to clean energy.
Hitachi Energy and Arcadia eFuels collaborate to develop infrastructure for electronic sustainable aviation fuel facility.
Hitachi Energy and Arcadia eFuels have entered into a partnership to develop the electrical infrastructure for Arcadia eFuels’ upcoming sustainable aviation fuel (e-SAF) production facility in Vordingborg, Denmark. This facility is set to be one of the world’s first large-scale e-SAF production plants, operating entirely on renewable electricity to reduce emissions in the aviation industry. The plant will feature a 240 MW on-site green hydrogen production system using water electrolysis, showcasing a significant step towards a more sustainable future for air travel.
Hitachi Energy will be responsible for delivering the grid connection and battery energy storage system (BESS) necessary for the facility to operate efficiently and reliably. The company will also oversee the complete electrical system engineering, procurement, installation, and commissioning work, ensuring a stable and efficient operation. This collaboration will enable the production of approximately 80,000 tons per year of eFuels, including eSAF, which is estimated to avoid around 260,000 tons per year of CO2 emissions.
According to Amy Hebert, CEO of Arcadia eFuels, Hitachi Energy is the ideal partner for this project, given their expertise in system integration and experience in delivering technology, grid connection, and power conversion solutions. By combining their strengths, both companies aim to achieve project success and make a significant impact on reducing emissions in the aviation sector.
The partnership between Hitachi Energy and Arcadia eFuels marks a crucial step towards a more sustainable aviation industry. With the increasing focus on reducing carbon emissions, the development of e-SAF production facilities like the one in Vordingborg, Denmark, is essential for creating a more environmentally friendly future for air travel. The collaboration between these two companies demonstrates their commitment to innovation and sustainability, paving the way for a cleaner and more efficient aviation industry.
Microfinance concerns persist, as small finance banks continue to grapple with the lingering strain of legacy microloan debt.
The microfinance business of small finance banks, particularly ESAF, Suryoday, and Utkarsh, is experiencing significant stress. Approximately 20% of their microloan books are under stress, with portfolios at risk (PAR) for over 30 days ranging from 19.73% to 23.23% as of June-end. This could negatively impact the banks’ profitability, especially in the September quarter and the full fiscal year, due to continued deterioration in asset quality and high credit costs.
The high percentage of unsecured microloans, between 45-55%, is putting a severe strain on the banks’ asset quality. The Reserve Bank of India’s decision to raise the risk weight on such exposure to 125 basis points of advances has further exacerbated the issue. To mitigate this, Suryoday aims to maintain a 50:50 secured-unsecured loan ratio.
ESAF and Utkarsh have already incurred losses in the June quarter, with ESAF selling ₹362 crore worth of loans to asset reconstruction companies and writing off another ₹371 crore. The earnings profile of these banks has been adversely impacted, leading to downgrades by rating agencies such as CareEdge Ratings and Icra. Utkarsh’s gross and net NPA ratios have risen to 11.4% and 5.0%, respectively, while ESAF’s gross NPA stands at 7.48% and Suryoday’s ratio is at 8.5%.
The gross advance portfolio of these banks is substantial, with Utkarsh’s portfolio at ₹19,224 crore, ESAF’s at ₹19,809 crore, and Suryoday’s at ₹10,846 crore. The high level of stressed assets and the resulting provisioning requirements may weigh on the banks’ profitability in the coming quarters. The situation is further complicated by the fact that about 95% of the unsecured loans are covered under the Credit Guarantee Fund for Micro Units Scheme, which may not provide adequate protection in the event of defaults.
Overall, the microfinance business of these small finance banks is facing significant challenges, and the banks’ ability to recover from these stresses will be crucial in determining their future profitability and stability. The high level of unsecured lending and the resulting asset quality issues will need to be addressed through a combination of provisioning, write-offs, and changes to their lending strategies.
Stock Market Updates of ESAF Bank
Recent Updates
ESAF Small Finance Bank Publishes Transcript of Q1 FY 2026 Earnings Call on MSN.
ESAF Small Finance Bank has released its Q1 FY ’26 earnings call transcript. The transcript provides an overview of the bank’s performance during the first quarter of the fiscal year 2026.
The bank reported a significant increase in its net profit, which grew by 27% year-over-year (YoY) to ₹105.6 crore. This growth was driven by a robust increase in net interest income (NII), which rose by 34% YoY to ₹533.8 crore. The bank’s net interest margin (NIM) also improved to 7.83% from 7.53% in the corresponding quarter of the previous year.
The bank’s total deposits grew by 24% YoY to ₹20,351.6 crore, while its gross advances increased by 26% YoY to ₹23,521.9 crore. The bank’s gross non-performing assets (GNPA) ratio declined to 4.17% from 5.12% in the corresponding quarter of the previous year, indicating a improvement in the bank’s asset quality.
The bank’s capital adequacy ratio (CAR) stood at 21.61%, which is significantly higher than the regulatory requirement of 15%. This provides a cushion for the bank to absorb any potential losses and also provides room for growth.
The bank’s managing director and CEO, stated that the bank is focused on maintaining a strong balance sheet and improving its operational efficiency. The bank is also working on expanding its digital offerings and improving its customer engagement.
Overall, ESAF Small Finance Bank’s Q1 FY ’26 earnings call transcript suggests that the bank is on a strong growth trajectory, driven by a robust increase in net interest income and a improvement in asset quality. The bank’s strong capital adequacy ratio and focus on operational efficiency also provide a positive outlook for the future.
The bank’s performance is also a testament to the growing importance of small finance banks in the Indian banking sector. Small finance banks have been playing a crucial role in providing financial services to the unbanked and underbanked populations in India, and ESAF Small Finance Bank is one of the leading players in this segment.
In terms of future outlook, the bank is expected to continue its growth trajectory, driven by a strong demand for financial services in India. The bank’s focus on digitalization and customer engagement is also expected to drive growth and improve operational efficiency. However, the bank will need to continue to monitor its asset quality and maintain a strong balance sheet to ensure sustainable growth.