Microfinance Loan Portfolio Jumps 48% In September Quarter
A woman signs a register to receive a loan during a meeting organized by SKS Microfinance Ltd. (Photographer: Adeel Halim/Bloomberg)

Microfinance Loan Portfolio Jumps 48% In September Quarter


Microfinance industry's gross loan portfolio grew by 47.9 percent to Rs 2.01 lakh crore in the quarter-ended Sept. 30 compared to that of Rs 1.36 lakh crore in the year-ago quarter, says a report.

In the second quarter ended September 2019, the total number of microfinance loan accounts were at 9.79 crore as compared to 7.43 crore account in the year-ago period, according to a quarterly report by Microfinance Institutions Network.

Since 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 (annualised growth rate of 16.87 percent).

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,
Harsh Srivastava, Chief Executive, MFIN

The report said in terms of regional distribution of GLP, East and North-East accounts for 40 percent, South 28 percent, North 10 percent, West 14 percent and Central contributes 7 percent. The top 10 states constitute 82.7 percent in terms of GLP.

Tamil Nadu is the largest state followed by West Bengal and Bihar.

Banks hold the largest share of the portfolio in micro-credit with a total loan outstanding of Rs 80,570 crore, which is 40 percent of the total micro-credit universe. NBFC-MFIs are the second largest provider of micro- credit with a loan amount outstanding of Rs 62,960 crore, accounting for 31 percent to total industry portfolio.

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

As on Sept. 30, 2019, the on-balance sheet portfolio of 85 NBFC-MFIs was Rs 62,960 crore which is spread across 601 districts of 35 states and union territories grew around 17 percent over the last fiscal.

Of these 54 NBFC-MFIs members of MFIN received a debt funding of total Rs 9,443 crore during Q2 FY20, the report showed.

MFIN is an industry association comprising 56 NBFC- MFIs and 35 associates including banks, SFBs and NBFCs. It is also the self-regulatory organisation for the regulated NBFC-MFI.

Also read: RBI Raises Limit For Borrowing From Microfinance Institutions

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