The microfinance industry has witnessed a growth of 26% over last year’s standing at Rs 84,716 crore. The gross loan portfolio of the overall microfinance industry for this year is at Rs 106,916 crore, which includes lending portfolios of NBFC-MFIs and other key lenders, including banks, small finance banks, NBFCs and non-profit MFIs, according to a recently-released report by Microfinance Institutions Network, the first RBI-appointed self-regulatory organisation (SRO) and an industry association.
As of FY 16 -17, NBFC-MFIs represent 42% of the microfinance lending, followed by banks at 38 % and SFBs at 14 %. The aggregate gross loan portfolio of NBFC-MFIs stood at Rs 46,847 crore in FY17 as compared to Rs 37,469 crore in FY15-16, witnessing a growth of 25% YoY.
According to the report, a total of Rs 2.83-crore loans were disbursed, which accounts for an increase of 13% over FY15-16.
Speaking on the latest industry report, Ratna Vishwanathan, CEO, MFIN, said, “The trend of a decrease in growth continued in the last quarter of the year, driven largely by the impact of withdrawal of high value notes from circulation. The decrease is not entirely attributable to demonization per say as other external factors and vested interests impacted performance in certain geographies, bringing down the overall growth. As compared to 89% growth on a YoY basis, the growth for the last quarter of the year has been 25%. Disbursements have gone down by 25% on a YoY basis. However, as liquidity has come back and certain troublesome geographies have started easing out, we hope to see better growth figures for the next quarters.”
Over half of the total disbursements (which accounts for 56%) during the concerned quarter came from 5 states, namely – Karnataka, Tamil Nadu, Maharashtra, Odisha and West Bengal. The average cost of funds for MFIs is 14.4%.
The distribution of GLP is the highest in South India at 31%, followed by North India at 27%, West India at 24% and East India at 18%. The client base has increased by 29% over the last year with NBFC-MFIs extending micro-credit to around 2.75 crore clients.