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The demand for small loans in rural areas has been robust, going by the steep spurt in the total outstanding loan portfolio of microfinance institutions (MFIs).
According to latest data from Microfinance Institutions Network (MFIN), a national body of NBFC-MFIs in the country, the total loan amount outstanding has increased by 51 per cent at ₹1,46,741 crore as on September 30, 2018, against the corresponding quarter of the previous financial year.
Of this, NBFC-MFIs hold the largest share of 37 per cent in micro credit, with total outstanding loans of ₹54,018 crore, followed by banks with ₹48,200 crore, accounting for 33 per cent. The number of active loan accounts grew by 27 per cent over the same period last year. Individual players such as Bharat Financial Inclusion (BFIL) also reported significant addition of customers. For instance, BFIL added 10.5 lakh customers in the second quarter, against 6.3 lakh in the year-ago period.
In terms of regional distribution of portfolio (GLP), East and North-East regions account for 36 per cent of the total portfolio, followed by South India at 26 per cent, while North and West India have 15 per cent each. The remaining 8 per cent comes from Central India.
The average loan amount disbursed per account during the second quarter was ₹25,070, an increase of 7 per cent from the first quarter of the current fiscal.
The driver for the growth in demand for loans as well as disbursal is the ‘huge’ unmet demand for micro loans, according to BR Diwakar, CFO, Creditaccess Grameen.
“Most of the micro loans segment is moving from informal to formal sources, which is also driving growth, besides the ability of NBFC-MFIs to raise required capital though equity and debt,” he told BusinessLine . According to MR Rao, CEO and MD, BFIL, gross loan portfolio growth was driven primarily by customer acquisition.
Agri, manufacturing
Loans extended to agricultural and allied activities had a major share in the gross loan portfolio at 53 per cent, followed by trade and services, manufacturing and production pooling in 42 per cent.
As household finance accounted for only 4 per cent of the loans, the use of loans for productive purposes has been confirmed.
Cashless disbursal of loans is another strong trend. Of the 44 NBFC-MFIs, 29 reported more than 90 per cent cashless disbursements, while 24 of them had 100 per cent cashless disbursals.
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