Microfinance Sector Grew At 26.5 Per Cent During Q3 Of 2019-20 - CRIF MicroLend Report

The microfinance sector grew at 26.5 per cent year-on-year (y-o-y) during the third quarter (October-December) of 2019-20 with an outstanding portfolio of Rs 2.12 lakh crore, according to CRIF MicroLend’s quarterly publication.

The sector witnessed a steep growth of 8.5 per cent quarter-on-quarter (q-o-q), which is 1 per cent lower than the growth in the same period previous year.

The sector’s outreach expanded further to 6.2 crore live customers with 10.6 crore active loans as of December 2019. Banks continue to dominate the market in Q3 FY 2019-20, with a gross loan portfolio (GLP) share of 39.6 per cent, with a marginal fall over the previous quarter at 40.8 per cent, and the GLP share of NBFC MFIs increased by 0.8 per cent over Q2 FY 2019-20.

Disbursements in Q3 FY 2019-20, stood at Rs 62,043 crores, up by 5.9 per cent from the previous quarter and a 22 per cent higher than same quarter previous year.

Both rural and urban geographies witnessed steep growth as compared to Q2 FY 2019-20, with rural sector growing at a phenomenal 10 per cent as against 1.6 per cent in the previous quarter and urban sector at 6.6 per cent against 1 per cent in the previous quarter. The rural sector continues to increase in size, standing at 56 per cent of the national GLP in December 2019.

The report said although banks continue to dominate the market with a portfolio share of 39.6 per cent in December 2019, it is the NBFC which have witnessed highest Q-o-Q growth in December 2019 at 11.4 per cent as against 5.2 per cent q-o-q growth of banks, 10.4 per cent of SFBs and 10 per cent of other lenders. Banks dominate both urban and rural geographies in terms of value as of Q3 FY 2019-20. In terms of active loans, urban geographies are dominated by banks, whereas NBFC MFIs play a critical role in rural areas.

Source: Publication: Business Standard, The Financial Express, Money Control, Outlook Money, |25th Feb 2020