Microfinance Loan Amounts Double In December Quarter Due To Low Base

Microfinance industry’s growth picked up in October-December quarter, as the sector continued its recovery from the demonetisation jolt.

Loan amount disbursed by Non-Banking Finance Company-Microfinance Institutions rose 98 percent to Rs 15,035 crore, industry association Microfinance Institutions Network said in a press statement. The loan amount, however, stood at 8 percent on a sequential basis.

The number of loans disbursed also jumped 61 percent to about 67 lakh, with over half of the disbursements coming from Karnataka, Odisha, Bihar, Maharashtra, and Uttar Pradesh.

Microfinance institutions, which provide loans to cash-driven segments such as farmers, women’s self-help groups, and small businesses, had seen a sharp decline in collection of loans and repayment during the demonetisation period.

Even as the industry showed recovery, the outstanding loan amount for NBFC-MFIs stood at Rs 39,916 crore — 33 percent of of the total micro-lending industry which was worth Rs 1.23 lakh crore, as of December 31. The banks had the maximum share of 37 percent, and small-finance banks accounted for 22 percent of the outstanding loan amount as a share of the total industry portfolio.

Other Highlights

• Asset quality improved, with the portfolio at risk for more than 90 days falling to 4.78 percent, a drop of 70 basis points from September.
• Total number of clients increased 19 percent year-on-year to 2.37 crore during the December-quarter.
• Average loan amount disbursed per account rose 23 percent to Rs 22,388.
• Gross loan portfolio rose 43 percent to Rs 42,701 crore, with nearly 60 percent coming from the North-East and South India.