Micro-Finance Grew 28% Till Q2 FY20: CRIF Insights

The microfinance sector grew by 28 percent year-on-year (Y-o-Y), as observed at the end of Q2 FY 2019-20 and the gross loan portfolio (GLP) of the sector stood at Rs 1962,000 crore, up by 1.35 percent from the previous quarter, stated the September quarter report on microfinance lending by CRIF High Mark. The outreach of the sector increased to 6 crore live customers, with 10 crore active loans.

As of September 2019, banks have the largest market share of the national portfolio, having surpassed NBFC MFIs by over 2 percent. The average ticket size of microfinance loans stood at Rs 325,000 in September 2019, a 12 percent y-o-y growth. Disbursements, both in terms of value and volume, which saw a dip in the previous quarter, have grown by 0.7 percent and 0.2 percent respectively over the previous quarter.

The report showed that the GLP of the microfinance sector has continued its growth trajectory in Q2 FY 2019-20, however at a slower pace of 1.35 percent quarter-on-quarter (q-o-q) in September 2019, compared to 6.9 percent in the same period last year. The sector registered a Y-o-Y growth of 28 percent standing at Rs 196.2 crore in September 2019. Both rural and urban geographies witnessed sluggish growth as compared to Q1 FY 2019-20, with the rural sector growing at 1.64 percent as against 3.49 percent in the previous quarter and urban sector at 1.01 percent against 1.75 percent in the previous quarter. The share of the rural sector in the national GLP increased by 2 percent y-o-y.

Disbursements in the second quarter of FY 2019-20 stood at Rs 51,623 crore, up by 0.7 percent from the previous quarter and a 3.3 percent Y-o-Y. Disbursements also saw a jump of 0.2 percent in terms of volume from the previous quarter. These growth rates, however, are comparatively much lower than growth rates in the same period in the previous year, which stood at 14.5 percent (in value) and 11 percent (in volume).

The eastern region continues to dominate the market in terms of disbursement value with a share of 35 percent, followed by south (25 percent), west (14 percent), north (11 percent), northeast and central at 7.5 percent each.

Online: Outlook Money | 28th Nov, 2019