Economy

Microfinance industry bounces back to pre-Covid levels

Our Bureau Mumbai | Updated on August 12, 2021

Records 26 per cent year-on-year growth in loan disbursement disbursing loans worth ₹93,100 crore in the January-March 2021 quarter

The microfinance industry is returning back to the pre-Covid situation, with the industry recording 26 per cent year-on-year growth in loan disbursement, disbursing loans worth ₹93,100 crore in the January-March 2021 quarter.

The industry had seen ₹73,736 crore worth of disbursement in the year ago quarter. Quarter-on-quarter, the growth was about 42 per cent over the October-December 2020 quarter’s disbursement of ₹65,441 crore.

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Of the total disbursement in the January-March 2021 quarter, banks accounted for 52 per cent of the total, followed by non-banking finance companies-micro finance institutions/NBFC-MFIs (29 per cent), small finance banks/ SFBs (12 per cent), as per a “Microfinance Pulse”, a joint report by Equifax and SIDBI.

The book size of micro fiinance industry was up 18 per cent y-o-y to ₹2,49,277 crore. Of this, banks accounted for 44 per cent, followed by NBFC-MFIs (32 per cent) and small finance banks (16 per cent).

Referring to the 18 per cent y-o-y growth from March 2020 to March 2021 in terms of portfolio outstanding, the report said it showed the microfinance industry’s resilience. It also underscores that the industry is recovering and returning back to the pre-Covid situation.

Avg ticket size up

The all-India average ticket size increased by 8 per cent y-o-y to ₹39,627 in the January-March 2021 quarter. The increase in the average ticket size in the reporting quarter was 19 per cent over the October-December 2020 quarter.

Delinquency comes down

As the collection efficiency of the industry witnessed an improvement, the active loans delinquency buckets are showing improvement in March 2021 compared to December 2020, the report said.

In the reporting quarter, the delinquency by days past due (DPD) came down in the 1-29 days DPD bucket to 4.55 per cent (7.50 per cent in the October-December 2020 period); 30-59 DPD to 2.90 per cent (4.73 per cent); 60-89 DPD to 2.01 per cent (3.49 per cent); 90-179 DPD to 4.12 per cent (4.96 per cent); and 1-179 DPD to 13.59 per cent (20.68 per cent).

Published on August 11, 2021

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