Microfin industry portfolio increases 24% as on June 30

NBFC MFI (microfinance institutions) continue to dominate the microfinance market with portfolio share of 40.4%, followed by banks at 32.5%, small finance banks at 17.2% as of June 30.

The outstanding portfolio of the microfinance industry rose 24% year-on-year to Rs 3.6 trillion as on June 30, latest report from CRIF High Mark showed. It rose 5.2% on a sequential basis.  

The gross loan portfolio of urban markets rose nearly 20% year-on-year, whereas rural markets grew 27.3% during the same period. The top 10 states contributed 83.1% of the gross loan portfolio, the report showed. Bihar remains the top state as of June 30.

“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 Sanjeet Dawar, managing director, CRIF High Mark.

Dawar added that the sustained growth in the microfinance sector, combined with government impetus for financial inclusion, is expected to create greater opportunities for micro borrowers to access formal credit and become a significant contributor to economic growth.

Active loans in the sector rose nearly 20% year-on-year to 145 million. Disbursements rose 19.4% year-on-year to Rs 67,785 crore in the June quarter.

Portfolio with loans overdue by more than 30 days improved to 2% as on June 30 from 2.2% a quarter ago. Portfolio with loans overdue by more than 90 days improved to 0.9% as June 30 from 1.1% a quarter ago.

NBFC MFI (microfinance institutions) continue to dominate the microfinance market with portfolio share of 40.4%, followed by banks at 32.5%, small finance banks at 17.2% as of June 30.

Published - 9th Nov 2023

Source- FinancialExpress