Equitas Small Finance Bank operates a diversified retail banking model that balances its foundational microfinance lending with a growing portfolio of secured asset products and a maturing liability franchise. The business model is best understood through its three interconnected components: asset generation, liability mobilization, and fee income — the same triad that defines any retail bank, but executed here with a specific focus on underserved market segments and a ground-level distribution model that distinguishes Equitas from urban-centric private banks. On the asset side, the loan book is organized across several product categories. Microfinance — joint liability group loans to women micro-entrepreneurs — remains a significant segment, representing approximately 25–30% of the overall loan book. These are typically loans of INR 15,000 to INR 100,000, disbursed in groups, with weekly or fortnightly repayment cycles and tenure of 12 to 24 months. The economics of microfinance are characterized by high yields (lending rates of 22–24% are typical for JLG products), high operating costs per loan due to the labor-intensive collection and group management model, and credit risk that is managed through group dynamics and field officer relationships rather than collateral. Vehicle finance is the second major asset segment, encompassing commercial vehicle loans, used vehicle loans, and two-wheeler financing. Equitas entered this segment deliberately as part of its diversification strategy, recognizing that vehicle finance serves a customer segment — small transporters, owner-operators, informal logistics entrepreneurs — that overlaps meaningfully with its core microfinance customer base in terms of income profile and credit history. Vehicle finance operates at lower yields than microfinance but with lower operating costs per loan, producing a different but complementary risk-return profile. MSE and small business loans represent the third pillar, targeting micro and small enterprises needing working capital or term financing in the range of INR 1 lakh to INR 25 lakh. These loans are partially secured — against business assets, property, or receivables — and serve businesses that have graduated beyond the JLG model but are still too small for mainstream commercial bank lending. This segment is strategically important because it captures the upward mobility of Equitas's existing microfinance customers as their businesses grow, creating a natural customer lifecycle within the bank. Housing finance is a growing segment, with Equitas offering home loans to the affordable housing segment — primarily first-time buyers in the INR 10–40 lakh ticket size range, often in semi-urban or tier-2 city locations where real estate prices remain within reach of the bank's core customer segments. Housing loans are long-tenure, low-yield products that add stability and duration to the balance sheet while deepening customer relationships. On the liability side, Equitas has made significant progress in building a retail deposit franchise. Savings accounts — including the popular Selfe savings account and digitally-acquired accounts — form the core of the transaction banking relationship. Fixed deposits, particularly from the urban salaried and senior citizen segments, have grown substantially as Equitas offers competitive rates (typically 25–75 basis points above large private bank rates) to attract deposits. The Current Account and Savings Account (CASA) ratio, a key measure of the quality and cost of the deposit franchise, has been a focus area: improving CASA reduces funding costs and improves net interest margins. The fee income component — processing fees, insurance commission, third-party product distribution, and digital transaction fees — remains smaller than at larger banks but is growing as the customer base becomes more engaged in transactional banking rather than single-product lending relationships. The unit economics of the SFB model are fundamentally shaped by the spread between asset yields (which are high, given the target customer segment) and funding costs (which are higher than large private banks due to the smaller, less established deposit franchise). This spread, known as the Net Interest Margin, runs at 8–9% for Equitas — significantly higher than large private banks that operate at 3–4% NIM but reflect both the higher risk premium on the asset side and the higher funding cost on the liability side. The key to profitability at Equitas is managing credit costs — loan loss provisions — within the corridor that the high NIM can absorb while still generating a return on equity above the cost of capital.