Microfinance loans: The Microfinance sector’s loan portfolio grew 19.5 per cent in the past 11 months as the loan outstanding as of May 2023 stood at Rs 3.5 lakh crore vis-a-vis Rs 2.93 lakh crore as of June 2022 while loan accounts grew to 13.2 crore till May from 11.8 crore in June last year. The April-May FY24 data for the microfinance sector was released on Friday by Microfinance Industry Network (MFIN), an industry association for Microfinance and RBI-recognized self-regulatory organization.
Lender-wise, 85 NBFC-MFIs were the largest provider of micro-credit with a loan amount outstanding of Rs 1,42,245 crore, accounting for 40.6 per cent of the total industry portfolio during the April-May period. On the other hand, 13 banks held the second largest share of the portfolio in micro-credit with a total loan outstanding of Rs 1,13,806 crore, which was 32.5 per cent of the total micro-credit universe.
Also read: Microfinance gross loan portfolio jumps 18% in FY23; write-offs up by 7.7%: Report
Small finance banks had a total loan amount outstanding of Rs 60,293 crore with a total share of 17.2 per cent. Lastly, NBFCs accounted for another 8.7 per cent and other MFIs had a 1 per cent share of the microfinance universe.
In terms of disbursement, microfinance loan disbursals during the two-month period increased to Rs 43,501 crore as compared to Rs 45,830 crore during April-May-June (Q1) of FY23. About 1.02 crore loans were disbursed during till May in FY24 as against 1.16 crore loans disbursed in Q1 FY23, indicating higher ticket size of new loans.
The average loan size, according to the report increased from Rs 39,597 in Q1 last fiscal to Rs 42,675 during April-May this fiscal.
“While growth is one aspect, the critical aspects of client outreach and credit quality have shown a definite positive change. It is heartening that the sector has increased client outreach by nearly 10 million during last 11 months period, taking the financial inclusion mission wider and deeper. Similarly, the portfolio quality of the loans has further improved PAR 1-60 days bucket declining from 3.62 per cent on May 31, 2022, to 1.77 per cent on May 31, 2023,” a statement by MFIN said.
Meanwhile, the gross loan portfolio of the microfinance industry had increased by 22 per cent to Rs 3.48 lakh crore as of March 31, 2023 from Rs 2.85 lakh crore as of March 31, 2022. 7.17 crore loans involving Rs 2.96 lakh crore were disbursed during FY23 as against 6.30 crore loans amounting to Rs 2.39 lakh crore disbursed in FY22.