MFI loans rise 24% to ₹3.5 lakh crore led by rural market growth: CRIF report
NBFC-MFIs continued to dominate the market with portfolio share of 40.4 per cent, followed by banks at 32.5 per cent
Portfolio outstanding of the microfinance sector grew 24.3 per cent yoy and 5.2 per cent sequentially to ₹3.5 lakh crore as of June 2023, according to the quarterly report by CRIF High Mark.
NBFC-MFIs continued to dominate the market with portfolio share of 40.4 per cent, followed by banks at 32.5 per cent, and small finance banks at 17.2 per cent. Gross loan portfolios of NBFCs grew 55.1 per cent on year, for NBFC-MFIs by 37.4 per cent, small finance banks by 23.4 per cent and for banks by 14.4 per cent.
“Urban markets registered year-on-year GLP growth of 19.9 per cent while rural markets showed 27.3 per cent growth during the same period. This growth can largely be attributed to the large-scale adoption of digitisation by the sector as well as the positive regulatory amendments brought in by RBI that have bridged the gap between rural and urban markets,” said MD Sanjeet Dawar.
The top 10 States contributed 83.1 per cent of the total gross loan portfolio. Bihar remained the top State. Overall loan originations for the quarter were at 158 lakh loans industry-wide for loans worth ₹67,800 crore.
Kerala, Uttar Pradesh and Tamil Nadu recorded highest sequential growth of 4.3-6.8 per cent. The microfinance sector continued to be dominated by the Eastern region at 31.8 per cent, followed by Southern States at 29.5 per cent.
“NBFC MFIs have 30.3 per cent share in East, NBFCs have 49.0 per cent in South and SFBs (small finance banks) have concentration of 37.6 per cent in South,” the report said.
The value of active loans was higher by 19.8 per cent yoy and 10.7 per cent qoq at Rs 14.5 crore. Average loan account balance stood at ₹24,600 higher by 3.4 per cent on year but 4.7 per cent lower on quarter. Average balance per borrower too grew 3.8 per cent yoy but fell 7.3 per cent on quarter.
8.3 per cent of borrowers had exposure to four or more lenders, with the highest concentration of these borrowers in Tamil Nadu at 12.9 per cent followed by Odisha at 11.0 per cent and Bihar at 10.4 per cent.
The portfolio at risk (PAR) for 30+ dpd (days past due) improved to 2.0 per cent from 2.2 per cent in March 2023 whereas for the 90+ dpd bucket improved to 0.9 per cent from 1.1 per cent a quarter ago.
Published- 9th Nov 2023