Microfinance sector’s loan portfolio drops down in Q2, FY21: CRIF High Mark Report

Microfinance sector’s loan portfolio drops down in Q2, FY21: CRIF High Mark Report

The gross loan portfolio (GLP) pertaining to microfinance sector reported a drop of  1.15 percent in the July-September quarter at Rs 2.24 lakh crore, on a quarter-on-quarter basis, reveals a study by  CRIF High Mark.

However, the GLP went up by 14 percent on a year-on-year basis. These figures have been reported in CRIF High Mark ’s ‘MicroLend’ report.

“The live customer base shrunk by 7 percent in Q2 as of Jun 2020 to nearly 5.7 crores. The active loan base also shrunk by nearly 1.5 percent to 10.5 crore active loans,” stated the report.

Few key observations from the report:

  • The GLP of the microfinance sector stands at ₹ 224K crores in Q2 FY 2020-21, declining by another 1.15% from Q1 FY 2020-21.
  • Disbursements regained pace in Q2 FY 2020-21, as lending operations resumed in the new normal, witnessing an increase of 380%, reaching ₹29.7K crore.
  • In Q2 FY 2020-21, loans of higher ticket sizes >40K saw a 10% spike in disbursements over the previous quarter.
  • As of Sep 2020, early repayment stress (1-30 DPD) spiked to 15.7%.
  • The monthly forward flow rates for 0-180 DPD observed in Sep 2020, spiked to 15%, with banks with the most stressed monthly forward flow rates at 26%, followed by SFBs at 14% and NBFC MFIs at 11%.

Navin Chandani, MD & CEO, CRIF High Mark: “As of Sept 2020, the microfinance sector stood at ₹224K crores, witnessing a Y-o-Y growth of 14%. Post lockdown, as lending operations resumed in the new normal, disbursements also regained pace in Q2 FY 2020-21, witnessing an increase of 380% over the previous quarter. The portfolio shows some possible stress with early delinquency (1-30 DPD) at 15.7%. The efforts by the industry and policymakers to leverage technology and develop effective digital collection mechanisms is the right step forward in maintaining control.”

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