Institutions outside Andhra Pradesh account for 70% of total payout

Micro-finance institutions reported a healthy loan demand in the October-December period. They disbursed loans aggregating Rs 6,194 crore, up 22 per cent, against Rs 5,089 crore in the preceding quarter (July-September).

MFIs outside Andhra Pradesh accounted for 70 per cent of the total loan disbursements in the reporting quarter, according to a report by Microfinance Institutions Network (MFIN). Due to a restrictive State law, MFI activity in Andhra Pradesh continued to be at a standstill.

The report is based on data collected from 41 MFIs, which represent 85 per cent of the microfinance sector in the country (excluding self-help groups).

Non-Andhra Pradesh MFIs reported 31 per cent increase in loans at Rs 4,345 crore (Rs 3,310 crore in the preceding quarter).MFIN said Tamil Nadu topped in terms of loan disbursals, accounting for 28 per cent of the total loans disbursed in the reporting quarter, followed by Karnataka (15 per cent), Maharashtra (11 per cent), Uttar Pradesh (8 per cent) and Madhya Pradesh (7 per cent).

As on December 31, the gross loan portfolio (GLP) of MFIs outside Andhra Pradesh (AP) was Rs 10,075 crore against Rs 8,865 crore in the preceding quarter. The GLP of AP MFIs edged up to Rs 8,564 crore (Rs 8,216 crore).

The loan outstanding per client increased to Rs 8,144 from Rs 7,530.

As an employer, the industry continues to face headwinds dragged down by the performance of Andhra Pradesh-based MFIs. Overall, the 41 MFIs employed 60,634 employees across the country as on December 31. This is down from 62,182 and 78,692 employees in Q2FY13 and Q3FY12, respectively. Outside Andhra Pradesh, total number of employees increased marginally to 35,151. In Andhra Pradesh, the total employee strength fell to 25,483 in Q3FY13 from 27,496 in the preceding quarter and 44,495 in Q3FY12.

Andhra Pradesh woes

Andhra Pradesh, which constituted about 75 per cent of the country’s total micro-finance lending prior to the crisis in 2010, has seen its share drop continuously since 2010.

MFIs in Andhra Pradesh disbursed Rs 1,850 crore in the third-quarter of the current fiscal, up four per cent from the preceding quarter. This translated to 30 per cent of the total loan disbursals in the October-December period.

“While MFI activity in AP continues to be at a standstill, the industry has grown in States such as West Bengal, Tamil Nadu, Kerala, Bihar and Uttar Pradesh,” the report said.

(This article was published on February 19, 2013)
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