Credit and finance for MSMEs: Loan delinquencies in the microfinance sector improved under all buckets except for loans unpaid even after 180 days of their due dates for the quarter ending December 31, 2022, self-regulatory organisation for the microfinance sector Sa-Dhan said in a statement on the sector’s quarterly report. As of December 31, 2022, portfolio at risk (PAR) 180+ days past due (dpd) deteriorated to 11.49 per cent from 11.02 per cent in Q2. On the other hand, PAR 30+ dpd (loans unpaid for over 30 days) improved to 3.43 per cent from 4.94 per cent in Q2, PAR 60+ dpd improved to 2.60 per cent from 3.83 per cent in Q2, and PAR 90+ dpd improved to 1.76 per cent from 2.27 per cent in Q2.
Apart from banks, for all other lenders — NBFC microfinance institutions (NBFC-MFIs), small finance banks (SFBs), NBFCs, and NFPs (not-for-profit MFIs) — PAR 30+ dpd was lower than the industry average. NBFCs had the lowest PAR 30+ dpd of 1.22 per cent followed by NFPs at 1.59 per cent, NBFC-MFIs at 2.18 per cent and SFBs at 3.22 per cent, the statement said.
West Bengal, Delhi, Puducherry, Uttarakhand, Punjab, Chhattisgarh, Madhya Pradesh, Rajasthan etc., were among the major states/union territories which had PAR 30+ dpd level higher than the industry average of 3.43 per cent. Also, all the Northeastern states except for Manipur had PAR 30+ dpd level higher than the industry. On the other hand, Karnataka, Bihar, Tamil Nadu, Maharashtra, Odisha and Gujarat were among the major states where PAR 30+ dpd was below the industry average.
In terms of bad loans, NPAs in the microfinance sector in Q3 continued to be the same as in the corresponding quarter of the previous financial year at around 13 per cent. NPA for banks, SFBs, NFPs, and NBFC-MFIs was approximately around 19.67 per cent, 12.51 per cent, 10.43 per cent and 9.28 per cent respectively, while it was lowest for NBFCs at 3.56 per cent, according to the data showed.
Sa-Dhan’s report said the NPA was mainly on account of the losses that occurred during the pandemic period and the subsequent loan portfolio had achieved almost the same performance as earlier.
Also read: Microfinance: Credit disbursed jumps nearly 90% in June quarter from year ago: Report
The sector disbursed Rs 77,819 crore during Q3, up 10.25 per cent from Rs 70,582 crore disbursed during Q3 in FY22. Among the lenders, NBFC-MFIs disbursed maximum of Rs 32,053 crore, growing 32 per cent from Rs 24,271 crore disbursed during Q3 last fiscal followed by banks at Rs 27,379 crore during Q3, though registering a decline in growth by minus 3.90 per cent from Rs 28,491 crore disbursed in Q3 FY22. Others including SFBs grew by 8.70 per cent in disbursements, NBFCs grew by 0.94 per cent and NFPs grew by 0.54 per cent.
The microfinance sector clocked 26 per cent growth in Q3 in terms of the portfolio size which stood at Rs 3.24 lakh crore from Rs 2.56 lakh crore during the year-ago period. Barring banks, which recorded 9 per cent growth in their microfinance portfolio, all other lenders recorded double-digit year-on-year growth. NBFCs, NBFC-MFIs, NFPs, and SFBs posted significant growth of 59 per cent, 43 per cent, 37 per cent and 20 per cent respectively.