Tag: loan portfolio

Weathering challenges of 2nd Covid wave, microfinance industry grows in Q1FY22

Banking & Finance

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The regional lockdowns across various parts of the country induced by the second wave of Covid notwithstanding, the microfinance industry witnessed a surge in disbursements in the April-June 2021 quarter.

Loan disbursals

Loan disbursals jumped to ₹25,503 crore during Q1FY-22 compared to ₹6,186 crore in the same period last year. The number of loans disbursed also increased to 71 lakh as against just around 21 lakh last year, MFIN (Microfinance Institutions Network) said in its latest issue of Micrometer report for April-June 2021.

As on June 30, 2021, the microfinance industry served 5.68 crore unique borrowers, through 10.30 crore loan accounts. The overall industry currently has a total gross loan portfolio (GLP) of ₹2,37,369 crore, an increase of over 4 per cent compared to ₹2,27,727 crores as on June 30, 2020.

Also read: Outlook for non-banks and housing financiers shifts to ‘improving’ from ‘stable’: Ind-Ra

According to Alok Misra, CEO and Director of MFIN, both loan portfolio and disbursements rose in Q1FY-22 on a Y-o-Y basis. The growth was however muted sequentially in comparison to Q4FY-21.

“This growth, despite difficult operating environment due to second wave of Covid-19, shows the ability of the industry to learn quickly and adapt to challenges. The Credit Guarantee Scheme for microfinance institutions with focus on small and medium-sized MFIs would ensure growth of MFIs in the short term as fresh loans need to be disbursed using the funds received under this scheme. In the medium to long-term, the asset-class based regulations proposed in the RBI’s consultative document, expected soon, would provide the much-needed impetus to industry to transform for a better future, leveraging on the past experience,” Misra said.

Share of loan portfolio

Banks (numbering around 13) hold the largest share of the portfolio in micro-credit with a total loan outstanding of ₹1,02,405 crore, accounting for a little over 43 per cent of the total micro-credit universe.

NBFC-MFIs are the second largest provider of micro-credit with a loan amount outstanding of ₹75,021 crore, accounting for 32 per cent. NBFC-MFIs witnessed close to 7 per cent increase in loan outstanding on a year-on-year basis against ₹71,301 crore as on June 30, 2020. The GLP includes owned portfolio of ₹65,206 crore and managed portfolio of ₹11,031 crore. Loan amount of ₹6,511 crore was disbursed by NBFC-MFIs in Q1FY-22 through 17.97-lakh accounts compared to ₹561 crore disbursed during the same period last year through 1.99-lakh accounts.

Average loan amount disbursed per account during the quarter under review was ₹36,243, which is an increase of around 29 per cent compared to the same quarter last financial year.

Small finance banks have a total loan amount outstanding of ₹38,624 crore with a total share of around 16 per cent. NBFCs account for another 8 per cent, and other MFIs for around one per cent of the total microcredit portfolio.

In terms of regional distribution of GLP, East, North-east and South continue to account for 66 per cent of the total portfolio.

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CreditAccess Grameen’s collection improves to 94% in Jan-March quarter

Banking & Finance

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CreditAccess Grameen, a NBFC-MFI, said its collection efficiency (loan EMIs collected from women borrowers) as also its year-on-year (YoY) and quarter-on-quarter (QoQ) loan disbursement (microfinance loans given to women borrowers) has improved during the January to March 2021 quarter.

The company in a release said it YoY and also QoQ consolidated disbursement has risen by 42 per cent and 3 per cent to ₹4,726 crore, respectively in January to March 2021 quarter. The collection efficiency for CAGL, too, has risen from 91 per cent in December 2020 to 94 per cent in March 2021 and for its subsidiary Madura Microfinance, collection efficiency increased from 86 per cent in December 2020 to 90 per cent in March 2021.

The number of women customers fully paying their loan instalments, has risen to 92.4 per cent in March 2021 for the company, as compared to 88.1 per cent in December 2020. The percentage of women customers not paying their EMIs, for the company, has come down to 4.4 per cent in March 2021 compared to 5.1 per cent in December 2020.

Active borrowers

The performance is on the back of a number of active borrowers rising to 29.63 lakhs for the company and 10.98 lakhs for its subsidiary. The new borrower addition during the January to March 2021 quarter, too, has seen a healthy rise to 2.88 lakhs on a consolidated basis. The consolidated Gross Loan Portfolio, too, has increased YoY by 16 per cent and QoQ by 13 per cent to ₹13,878 crore.

Owing to improved performance, the overall portfolio at risk for 30 days, 60 days and 90 days, has seen gradual decline to 6.6 per cent, 5.9 per cent and 5.4 per cent, respectively for the company as on March 31, 2021.

Regarding its subsidiary Madura Microfinance, the overall portfolio at risk for 30 days, 60 days and 90 days, gradually declined to 9.7 per cent, 6.7 per cent and 4.7 per cent, respectively on March 31, 2021. The restructured book amounts to ₹75 crore (0.6 per cent of GLP) as on March 2021 for CreditAccess Grameen.

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