SFBs aka the small finance banks are kinda becoming a big thing right here in India, and for those who don’t know what they are, well just know that these are small financial institutions that are out there serving and providing banking services to those who are kinda underserved by the larger banks in the country. Simple as that! Among these SBFs in the country, there is AU Small Finance Bank, which is not just one of the biggest but one of the most preferred and famous SFBs in the country. Just so you know though, it has been around ever since 1996, but it wasn’t until 2017 when it became something special. And if you’re interested in knowing a little more about this bank, then how about we walk you through a SWOT analysis of AU Small Finance Bank? Well, that’s precisely what we’re up to today, so, let’s just get to it then.
Strengths Of AU Small Finance Bank
1. Tons of Happy Customers
Well, first of all, it is THE biggest small finance bank in the country, no two ways about that. Though, how are we so certain about that? Well, that’s just because as of 2025, it has more than 11 million customers right here in India, and compared to all the other SFBs in the country, this number is just HUGE.
2. Helping Out A Lot Of People
It is actually in the definition of small finance bank that they’re the ones to help out individuals and small businesses that are kinda left out by the main banking scene of the country, and that’s precisely where banks like AU small finance banks come in. And just so you know, they call it “financial inclusion.”
3. Loads of Cool Stuff to Pick From
Though, with AU Small Finance Bank, it isn’t just the basic banking services that you get, they’re kinda full-fledged banks working at a smaller scale, that’s all. Like, you get all the services such as savings accounts, car loans, house loans, insurance, and whatnot.
4. Everyone Knows Their Name
The very next year, they’ll complete their 3 decades of being a small finance bank in the country and looking at that, now you get it, you know like, why is it one of the most famous SFBs in the country, correct? At this point, it is their name that is alone enough to attract customers.
5. Government Backing Things Up
Since they’re this “small finance bank,” the government is there to take care of a lot of different things as well as provide them with specific benefits too like cheaper ways to borrow money aka lower interest rates.
6. Getting Techy Nowadays
Do you know that AU, though as a small finance bank, also has a mobile app? And on top of that, as of 2025, around 800k users actively use their mobile app. As per some reports, they’re handling about ₹500 crore worth of digital transactions every month!
Weaknesses Of AU Small Finance Bank
1. Stuck in One Spot
Well, the main thing that is kinda keeping this SFB a bit limited is their approach to expansion, like out of all of their 887 branches in India, most of them are only in Rajasthan. And to be honest, there is the possibility of things going wrong here, like, if something crazy happens in Rajasthan, like a drought or whatever, it could hit them hard.
2. Big Players Picking on Them
Sure, AU has become the biggest small finance bank in India, but now they’re up against big players like HDFC or ICICI, so yes, it is kinda tough for them.
3. Some Loans Going Bad
With SFBs, it is usually the problem, and lately, some people they lent money to aren’t paying back, and who are these people? Well, mostly small businesses and credit card users. Their “bad loan” rate shot up to 2.31% by late 2024.
4. Tiny Advertising Wallet
Sure, the word-of-mouth publicity is working out great for AU’s small finance bank, but they still have a tiny budget for marketing and all that. Like, AU’s only spending about ₹100 crore on ads, while the big banks are throwing around ₹1,000 crore!
5. Rough Patch Alert
See, in the last financial year, their growth wasn’t as impressive as they thought, which went down from 25% to just 20% last year.
Opportunities For AU Small Finance Bank
1. New Places, New Faces
See, we told you that AU Small Finance Bank is mostly focusing on Rajasthan state, but now things are changing a bit like they have about 2,383 branches in 5 states in the country.
2. Digital Transformation Time
We can’t stress enough how important it is for banks to go fully digital these days, and thankfully, AU Small Finance Bank is working towards it.
3. Team-Ups for the Win
Just a few years ago and even now, we’re seeing AU Small Finance Bank teaming up with tech experts as well as using those government programs which are helping them grow by a big margin.
4. New Areas To Get In
Sure, they’re the best in terms of the SFBs in India, but now they’re getting into other things as well like insurance plans (micro-insurance), and just so you know, it has a market that’s jumping from ₹23,000 crore to ₹50,000 crore by 2025.
5. Government Goodies
There are many schemes launched by the Indian government that AU Small Finance Bank can take good advantage of, and we’re talking about schemes like Programs like Jan Dhan Yojana (460 million accounts!) or MUDRA loans (₹3 lakh crore handed out).
Threats For AU Small Finance Bank
1. Rule Changes
Well, it is true that rules change quite a bit, and no one knows when RBI will come up with the new one, and it will be these SFBs that will be affected the most.
2. Money Slowdown
India’s economy isn’t zooming as much, like, in just a few years, we have seen it get down to 6.5% in 2023 from 8.7%. So that’s that too.
3. Hacker Attackers
Well, it is pretty much the problem with all the banks out there, but being a small finance bank, it is more vulnerable.
4. Picky Customers
You see, after COVID, 75% of people are all about digital banking, but AU’s only at 45% digital users and that’s a big thing they must work on.
