Tag: gross loan portfolio

Microfinance loan portfolio grows 11.9% to ₹2,59,377 cr as on March-end: MFIN

Banking & Finance

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The overall microfinance industry’s gross loan portfolio (GLP) surged by 11.9 per cent to ₹2,59,377 crore as on March 31, 2021 from ₹2,31,787 crore as on March 31, 2020, says a report.

The growth was driven by an addition of four lakh borrowers during the pandemic-struck 12-month period ending March 2021, according to a report – Micrometer, released by Microfinance Institutions Network (MFIN).

Also read: In a boost to MFIs, FM hikes ECLGS limit by ₹1.5-lakh cr

MFIN is an industry association comprising 58 NBFC-MFIs and 39 associates, including banks, small finance banks (SFBs) and NBFCs. As on March 31, 2021, the microfinance industry served 5.93 crore unique borrowers, through 10.83 crore loan accounts, the report said.

It said 13 banks hold the largest share of the portfolio in micro-credit with a total loan outstanding of ₹1,13,271 crore, which is 43.67 per cent of total micro-credit universe.

Non-banking financial companies-microfinance institutions (NBFC-MFIs) are the second-largest provider of micro-credit with a loan amount outstanding of ₹80,549 crore, accounting for 31.05 per cent to total industry portfolio, the report showed.

SFBs have a total loan amount outstanding of ₹41,170 crore with a total share of 15.87 per cent.

NBFCs account for another 8.36 per cent, and other MFIs account for 1.05 per cent of the total microfinance universe, it said.

The report further showed that the gross loan portfolio of NBFC-MFIs increased by 11 per cent to ₹81,475 crore as on March 31, 2021, compared to ₹73,412 crore as on March 31, 2020.

This GLP on NBFC-MFIs includes owned portfolio of ₹68,894 crore and managed portfolio of ₹12,581 crore, it said.

The association said its NBFC-MFI members disbursed ₹57,891 crore of loans in fiscal 2020-21 through 1.70 crore accounts.

Also read: RBI proposes regulatory framework for microlenders

Average loan amount disbursed per account during FY20-21 was ₹35,726, an increase of around 20 per cent in comparison to last financial year, the report said.

During FY2020-21, NBFC-MFIs received a total of ₹40,797 crore in debt funding which is 9.2 per cent higher than in FY2019-20.

Total equity of the NBFC-MFIs grew by 15 per cent to ₹18,663 crore as on March 31, 2021.

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Banks’ microfinance gross loan portfolio grows, SFBs see de-growth: Report

Banking & Finance

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The portfolio outstanding of microfinance sector stood at Rs 2.54 lakh crore as of March 2021, with 10% quarter-on-quarter growth and 8.4% year-on-year growth.

The gross loan portfolio (GLP) of banks in the microfinance sector grew 15.5% year-on-year to Rs 1.06 lakh crore at the end of the previous fiscal while that of small finance banks (SFBs) de-grew 6.6% y-o-y to Rs 41,708 crore, according to a report published by credit bureau CRIF High Mark.

The 15th edition of CRIF MicroLend, released on Thursday, showed that banks continued to dominate the microfinance market with a portfolio share of 42% at the end of FY21, up from 39.4% in FY20. Significantly, SFB’s market share in the last fiscal declined to 16.4% from 19.1%.

During the third quarter of FY21, the market share of banks and SFBs stood at 41.7% and 16.9%, respectively, in the microfinance space. Between Q4FY20 and Q3FY21, NBFC-MFIs’ market share stood almost the same at around 30%, while it grew to 30.6% at the end of Q4FY21.

Interestingly, earlier this month, P N Vasudevan, managing director and CEO of Equitas Small Finance Bank, said its conscious plan to grow the unsecured micro finance book at a “slower pace’ compared to the rest helped mitigate the overall credit cost impact. “As of March 31, 2021, the unsecured microfinance advances were 18% while the remaining 81% were secured loans. The least impacted product, small business loans secured by house property, constitutes 45% of the total advances,” Vasudevan said.

“Microfinance industry demonstrated strong resilience and recovered in Q2 after muted business in Q1FY20-21. Loan disbursements in Q3 and Q4 of FY21 were similar to previous year’s respective quarters,” said Vipul Jain, head of products, CRIF High Mark, while releasing the report.

The portfolio outstanding of microfinance sector stood at Rs 2.54 lakh crore as of March 2021, with 10% quarter-on-quarter growth and 8.4% year-on-year growth.

“Delinquency was higher in Q3 and Q4 of FY20-21 compared to pre-Covid levels. We hope to see these numbers move back to their historic levels in coming quarters,” Jain said.

The report said early delinquency (1- 30 days) reduced by 3.6% in March 2021 compared to December 2020 from 8.7% to 5.1%. Microfinance loans with repayment delays of over 30 days (30+% delinquency) remained high for West Bengal, Assam and Maharashtra.

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