Microfinance Industry Set To Cross Rs 1 Lakh Crore Loan Portfolio, Report Says 
A customer counts Indian rupee banknotes at a store. (Photographer: Dhiraj Singh/Bloomberg)

Microfinance Industry Set To Cross Rs 1 Lakh Crore Loan Portfolio, Report Says 

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India's microfinance industry is set to cross Rs 1 lakh crore loan portfolio during September quarter of the ongoing financial year, according to a report.

The industry witnessed a 9 percent sequential growth in its gross loan portfolio to Rs 98,107 crore during April-June 2019-20, the report by industry's self regulatory organisation Sa-Dhan said.

The data is based on the information provided by 200 microfinance institutions.

"FY 2019-20 has started on a positive note for the microfinance industry. The industry is set to cross the landmark figure of Rs 1,00,000 crore GLP by Q2 of the current fiscal," said P Satish, executive director at Sa-Dhan.

Satish said the MFI industry plays a pivotal role in serving the underserved and unserved sections of the population and it will play a key role in financial inclusion and taking many government schemes to the last mile.

The overall combined micro credit portfolio of all lenders as on June 30 stood at Rs 1.89 lakh crore of which NBFC-MFIs have lent Rs 71,850 crore with 38 percent market share, the report said.

This is followed by banks' lending to the tune of Rs 64,814 crore to the sector with 34 percent market share.

Small finance banks have a portfolio of Rs 31,958 crore constituting 17 percent share, NBFCs Rs 18,767 crore accounting for 10 percent and Not Profit MFIs have least portfolio of Rs 1,702 crore constituting 1 percent share.

As per the report, the average ticket size of microfinance lending by banks is Rs 42,249, SFBs Rs 32,946 and NBFC-MFIs Rs 27,329.

The average ticket size of the sector is Rs 33,511. Sikkim, Dadra & Nagar Haveli, and Nagaland have average ticket size over Rs 50,000, followed by Assam at Rs 45,537; West Bengal Rs 45,274 and Uttarkhand Rs 40,468.

Tamil Nadu, West Bengal, Bihar, Karnataka, and Maharashtra are the top five states in terms of loan portfolio outstanding and active loan accounts, said the report.

The microfinance business in India is spread across 615 districts of the country.

Also read: Microfinance Disbursements Hold Up Despite Tight Liquidity: ICRA

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