Microfinance Industries Network (MFIN) is expecting to post a growth of over 50% in loan portfolio the current financial year.
The industry had been under tremendous pressure ever since changes were introduced in the microfinance policies in Andhra Pradesh three years ago. The move had led to a revamp of regulations governing the sector.
Industry veterans, however, say with the new regulations now in place, access to finance has become easier and growth has picked up.
?In the last fiscal, the microfinance industry outside Andhra Pradesh grew 39%, but in the current fiscal, we expect the industry to grow over 50%,? Microfinance Industries Network (MFIN) chief executive officer Alok Prasad told FE.
According to MFIN, as of June 30, aggregate gross loan portfolio (GLP) of MFIs stood at R21,332 crore, a growth of 17% over the first quarter of FY13. Over this period, MFIs received total debt funding of R998 crore, with 79% of this coming from banks.
?Key constraint to the industry growth has been the funding. Banks are now extending loans to big and mid-size MFIs that are well-capitalised and well-governed. However, smaller MFIs are still facing credit crunch as banks have now become more risk averse,? Prasad observed. On an average, MFIs get 80% of their funding from banks.