New Delhi:  Microfinance Institutions Network (MFIN) released the tenth issue of the MicroMeter on the status of the Indian microfinance industry, as of 30 June 2014. This report provides a comparative analysis with the corresponding quarter of previous fiscal year (Q1 FY 13-14) and previous quarter of the current fiscal year (Q1 FY 14-15). The analysis presented in this issue is based on data collected from 48 MFIN member NBFC–MFIs.

The aggregate Gross Loan Portfolio (GLP) of Micro Finance Institutions (MFIs) stood at Rs 261.5 bn, registering a growth of 44% over the same quarter of the last fiscal. Client coverage grew by 23% with over 26.5 mn low income households across 493 districts getting micro-loans from NBFC-MFIs.  Total loan disbursed showed a growth of 34% compared to Q1 FY 13-14.

Commenting on the continued impressive performance of the industry Mr. Alok Prasad, CEO, MFIN, said,“ With a predominantly women client base of more than 26.5 million, the MFI industry is well positioned to play a pivotal role in effectively supporting the new Government’s plans on financial inclusion, including opening first time bank accounts and improving financial literacy. RBI’s supportive regulatory framework and a forward looking policy on financial inclusion have promoted a robust partnership model between Banks and NBFC-MFIs. Many MFIN members are now well positioned to take the big leap towards transformation as specialized ‘small finance banks’ meeting the full range of banking requirements of the BOP segments and micro/small enterprises. ”

The MFI industry is now well dispersed geographically with presence across regions. GLP in East at 27%, South at 33%, West and North at 20% each reflects a regionally spread out portfolio. Average loan amount disbursed per account remained under Rs 15,000. The Productivity ratios for MFIs also continued to improve with GLP per branch at Rs 26 mn, up by 32% over Q1 FY 13-14. Funding availed by MFIs in Q1 FY 14-15 on other hand, has grown by 154% reflecting improved investor confidence. About 77% of this funding came from banks and rest from other financial institutions.

As of 30th June, 2014, PAR for NBFC-MFIs (other than MFIs under CDR) remained well under 1% of GLP. Maharashtra, MP, Tamil Nadu, Gujarat and Karnataka continue to have the highest concentration of MFIs. The top states in terms of disbursements were West Bengal, Tamil Nadu, Karnataka, Maharashtra and Uttar Pradesh accounting approximately for 60% of disbursements by MFIs. Tamil Nadu and West Bengal are the top states in terms of the clients. The states with the highest portfolio growth are Manipur, Himachal Pradesh, Jammu & Kashmir, Delhi and Assam.

The industry provides insurance (credit life) to over 28.3 mn clients with sum insured of Rs 448.6 bn was extended through MFI network. Pension accounts were extended to cover over 1.5 mn clients according to data reported by 14 MFIs.

Key Highlights as of 30th June 2014 (comparison of Q1 2014-15 over Q1 2013-14)

·         MFIs provided microcredit to over 26.5 mn clients

·         Client base increased by 23%

·         Aggregate gross loan portfolio (GLP) of MFIs stood at Rs 261.5 bn – a growth of 44%

·         80% of the MFIs showed positive yoy growth in GLP

·         Total number of loans disbursed by MFIs grew by 34%

·         Amount of loans disbursed by MFIs grew by 48%

·         Funding to MFIs grew by 154%

·         Portfolio at Risk (PAR) figures (PAR 30, 90, 180) remained under 1%

·         Average loan amount disbursed per account < 15,000

·         MFIs now cover 30 States/Union Territories and 493 districts

·         MFIs’ coverage is now geographically well dispersed with GLP in east at 27%, south at 33%, west and north at 20% each

·         Productivity ratios for MFIs continued to improve. GLP per branch is now at Rs 26 mn, up by 32%

·         Insurance (credit life) to over 28.3 mn clients with sum insured of Rs 448.6 bn was extended through MFI network

·         Pension accounts were extended to cover over 1.5 mn clients through MFI network