Money & Banking

Microfinance industry’s loan portfolio grew 47.85 per cent till September this year

Our Bureau New Delhi | Updated on November 25, 2019

Microfinance industry’s gross loan portfolio grew whopping 47.85 per cent year-on-year as on September 30, 2019 at Rs 2,01,724 crore, a industry report showed.

The total number of microfinance loan accounts also grew to 9.79 crore as at September 30, 2019, up from 7.43 crore accounts on the same date last year, the latest MFIN’s micrometer report for the second quarter (July-September) this fiscal showed.

Harsh Srivastava, CEO, MFIN, said “It is heartening that in the last thirty months, an additional 18.3 million women have taken microfinance loans.

This growth in unique borrowers is an endorsement of the unstinted trust that small borrowers have reposed on all RBI-regulated microfinance institutions. This is also seen in the strong track record of repayment that microfinance continues to demonstrate”.

He said that microfinance sector continues to grow steadily as new microfinance customers are being added. CAGR has been consistent for years-- 42 per cent for the last six years. There is a lot of unmet demand still as is evident from the fact that only 27 per cent of potential households have been reached by Microfinance, Srivastava said.

Microfinance industry serves estimated 5.46 crore unique borrowers through 9.79 crore loan accounts.

NBFC-MFI loan portfolio

Meanwhile, NBFC-MFI loan portfolio grew 16.67 per cent year-on-year to Rs 62,960 crore as at September 30, 2019.

As much as 94 per cent of loans are through cashless mode. Overall health portfolio remains good with Portfolio at Risk (PAR) greater than 90 days is 0.42 per cent of Gross Loan Portfolio.

Microfinance Institutions Network (MFIN) is a RBI recognized self-regulatory organisation and industry association of the microfinance industry. The latest micrometer report reveals that the access to microfinance is rising at a healthy pace, nationally, and increasing number of small borrowers across the country are paying back their dues on time. This endorses the fact that microfinance loans are increasingly seen by small borrowers as big economic facilitators, regulated and organized form of finance, over the unregulated forms of availing finance, as per Micrometer data.

Over the last 2.5 years, beginning March 2017, which also marked the end of demonetisation period, an estimated 1.83 crore unique borrowers have been added, which is an average of 0.73 crore per year (CAGR of 16.87 per cent).

Banks hold the largest share of portfolio in micro-credit with total loan outstanding of Rs. 80,570 crore, which is 40 per cent of the total micro-credit universe.

Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) are the second largest provider of micro-credit with a loan amount outstanding of Rs 62,960 crore, accounting for 31 per cent to total industry portfolio.

Small Finance Banks (SFBs) have a total loan amount outstanding of Rs 34,829 crore with total share of 17 per cent, NBFCs 11 per cent with total loan outstanding of Rs 21,381 crore and other MFIs account for 1.0 per cent share in the microfinance universe.

Published on November 25, 2019

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