The microfinance industry served 5.80 crore unique borrowers, through 10.37 crore loan accounts, as on June 30, 2020, revealed Microfinance Institutions Network’s Micrometer report for April to June 2020.
The report further revealed that the industry currently holds a total loan portfolio of Rs 2, 27,727 crore for loans originating post February 2017.
Speaking on the report, Dr Alok Misra, MFIN CEO said, “April to June 2020 quarter has been unprecedented both for microfinance lending institutions and microfinance borrowers. With lockdown impacting livelihood of clients, MFIs provided moratorium to clients as per RBI guidelines. However, the moratorium was not extended to MFIs by all lenders, which caused double squeeze. Policy support in the form of TLTRO and Special Liquidity Facility helped MFIs overcome the difficult period; small and medium MFIs bore the brunt of liquidity challenge.”
“ The period demonstrated the resilience of the sector and its ability to adapt to changing situation by way of remote back-end operations, increased use of digital methods for spreading client awareness on COVID protocols and moratorium as well as repayments. The digital India mission saw empirical proof during the period with MFIs holding virtual group meetings to keep their client connect. Green shoots are evident in the sector as clients seek to start credit cycle to rebuild their livelihoods and funders and investors maintaining their support. With translation of policy intent to actual liquidity flow to even small and medium MFIs, it is hoped that by the year end, the repayment and disbursement cycle will inch towards pre COVID times. ”
MFIN also reported that MFI universe in total holds the largest share of the portfolio in micro-credit with a total loan outstanding of Rs 92,675 crore which is around 40.7 percent of total micro-credit universe.
NBFC-MFIs are the second largest provider of micro-credit with a loan amount outstanding of Rs 70,819 crore, accounting for 31.1 percent to total industry portfolio.
While Small Finance Banks have a total loan amount outstanding of Rs 39,667 crore with a total share of 17.4 percent, NBFCs account for another 9.8 percent, and other MFIs account for 1.0 percent of the universe.
In terms of NBFC-MFIs, the aggregate gross loan portfolio (GLP) of MFIs reported Rs 72,170 crore as on June 30, 2020, which represents a Year-on-Year growth of 25 percent as compared to June 30, 2019, and -3 per cent in comparison to March 31 2020. The GLP includes owned portfolio of Rs 55,296 Cr and managed portfolio of Rs 16,874 Crore.
The regional distribution of microfinance portfolio (GLP), is dominated by East and North-East which account for 34 per cent of the total NBFC MFI portfolio, with the rest 66 per cent divided between South 25 per cent, North 15 per cent, West 15 per cent and Central 11 per cent.
Five top states in terms of loan amount outstanding for MFIN Member NBFC-MFIs are Bihar, Karnataka, Tamil Nadu, Odisha and Maharashtra. They account for 48 per cent of the Gross Loan Portfolio, and the Top 10 states account for 80 per cent of the total loan amount outstanding.