Micro Finance Sector - On A Tightrope Walk: Prabhudas Lilladher
A customer counts Indian rupee banknotes in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Micro Finance Sector - On A Tightrope Walk: Prabhudas Lilladher

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Prabhudas Lilladher Report

Our channel checks indicate multiple challenges for micro finance institutions in the nature of strained collections (efficiency at 60-70% in May/June 2021), operational bottlenecks, elevated early bucket delinquencies (30-60 days past due portfolio-at-risk ~ double digits) and need for higher provisioning (3-6% credit costs for FY22 as in FY21).

While Assam loan relief and Reserve Bank of India consultation paper on harmonisation of lending practices could bring respite in medium term, MFIs’ business models are expected to undergo structural changes ahead.

Click on the attachment to read the full report:

Prabhudas Lilladher MicroFinance Sector Update.pdf

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