The gross loan portfolio (GLP) of the microfinance institutions (MFI) in the country has dropped marginally in the June quarter from the previous quarter, first time since the September 2021 quarter, as per the data available in the latest quarterly microfinance report by industry association Microfinance Industry Network (MFIN).
The MFI portfolio declined to Rs 4.24 lakh crore during the June quarter from Rs 4.33 lakh crore during the March quarter even as there was 19.2 per cent growth from Rs 3.55 lakh crore during the June quarter last year.
In terms of unique borrowers, the count grew to 8 crore during the June quarter from 7.8 crore in the March quarter this year while total loan accounts saw a flat quarterly growth from 14.9 crore in the March quarter.
Meanwhile, the sector’s portfolio at risk (PAR), a measure of the potential for investors to lose money on their investments due to various external factors, by 31-180 days past due (delinquency) also increased.
The report showed microfinance PAR 31-180 during the June quarter deteriorating to 3.8 per cent for small finance banks (SFBs) from 2.9 per cent in the March quarter and 1.9 per cent in the June 2023 quarter.
Likewise, NBFC-MFIs par 31-180 increased to 2.5 per cent during the June quarter this year from 1.4 per cent during the year-ago period. For banks, it increased to 2.6 per cent from 2.4 per cent during the June quarter last year and for NBFCs, it increased to 1.6 per cent from 1 per cent.
“The portfolio outstanding has decreased by around 2.1% compared to March 2024, the first quarter is generally sluggish. The deterioration of portfolio quality is for all types of regulated entities (REs). Prolonged heatwave and external factors like incitement to not repay are the factors and lower disbursements in Q1 FY24-25 also has inflated the PAR,” Alok Misra, CEO & Director of MFIN told FE Aspire.
The loan amount disbursed also declined during the June quarter to Rs 76,567 crore vis-a-vis Rs 1.07 lakh crore disbursed during the March quarter along with the drop in the number of loans to 157 from 223 during the said period.
The microfinance sector’s portfolio as of March 31, 2024, had jumped by 24.5 per cent to Rs 4.33 lakh crore from Rs 3.48 lakh crore as of March 31, 2023. The sector served 7.8 crore unique borrowers through 14.9 crore loan accounts during the year.