Sunday, December 10, 2023

Microfinance portfolio up 24% in June quarter, delinquencies contained

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Mumbai: Small ticket borrowers from the bottom of the pyramid borrowed 24 percent higher during the June quarter and have also managed to contain delinquencies, a report by credit bureau Crif High Mark said.The outstanding portfolio of the micro-finance sector is at Rs 3.55 lakh crore as of June 2023, up 24.3 percent year-on-year, the credit bureau said.

Urban markets registered year-on-year growth of 19.9% while rural markets showed 27.3% growth during the same period.

“This growth can largely be attributed to the large-scale adoption of digitisation by the sector as well as the positive regulatory amendments brought in by RBI that have bridged the gap between rural and urban markets” said Sanjeet Dawar, managing director, CRIF High Mark.

Portfolio at risk where repayments are 30 days past the due date improved from 2.2 percent as of March 2023 to 2 percent as of June 2023. Portfolio at risk where repayments are 30 days past the due date improved from 1.1 percent as of Mar’23 to 0.9 percent as of June 2023.

In terms of lender category, NBFC MFI dominate the market with portfolio share of 40.4 percent, followed by Banks with 32.5 percent share, small finance banks with 17.2 percent share as of June 2023A state-wise analysis showed that 10 states contributed to 83.1% of the gross loan portfolio. Average balance per borrower for top states Bihar, Tamil Nadu and Uttar Pradesh stood at ?29300, Rs 28,700 and Rs24800 respectively as of June 2023.Microfinance sector dominated the Eastern region (31.8%) followed by Southern (29.5%), as of June 2023.

The industry players say that government impetus for financial inclusion is expected to create greater opportunities for micro borrowers to access formal credit and become a significant contributor to economic growth.

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