Micro-loans jump 40 per cent to over Rs 1,78,587 in FY19

The microfinance industry’s total loan portfolio grew 40 per cent to Rs 1,78,587 crore in FY19, with top 10 states accounting for 83 per cent of the gross loan portfolio, says a report.

In FY18, total loan portfolio of the industry had stood at Rs 1,27,223 crore.

“Market share of top 10 states in portfolio outstanding at Rs 1,48,440 crore is 83 per cent as of March 2019,” according to a joint report by Equifax and Small Industries Development Bank of India (SIDBI).

Bengal and Tamil Nadu contributed 34.7 per cent of the top 10 states. Followed by Bihar, and Karnataka are having portfolio of over 15,000 crore, indicating a highly concentrated market.

Bihar saw the highest growth at 54 per cent in FY19.

Sidbi chairman Mohammad Mustafa said, “growth in the overall microfinance portfolio is encouraging.”

In FY19, fresh loan disbursal stood at Rs 213,074 crore, an increase of 36 per cent over FY18, while disbursal in terms of volume grew 20 per cent.

NBFC-MFIs hold the largest share of portfolio in micro-credit with total loan outstanding of Rs 68,156 crore, accounting for 38 per cent of the total industry portfolio.

Delinquency level improved across all the days past due buckets. Portfolio at risk, which indicates the early delinquency rates, has come down from 4.74 per cent in FY18 to 1.40 per cent in FY19.

Risk level in the 60-89 days past due bracket has come down from 2.41 per cent in FY18 to 0.24 percent in FY19, the report said.

The industry is present in 619 districts and the top 30 districts comprised 25 per cent of portfolio outstanding whereas 213 districts contributed 80 per cent of the portfolio.