MFI Industry serves 5.83 crore unique borrowers with 10.50 crore loan accounts

Microfinance loan disbursals during the October to December 2020 quarter jumped 90.4 per cent to INR 59,507 crores as compared to the previous quarter (INR 31,261 crores). Similarly, the number of loans disbursed doubled to 1.79 crores (0.88 crores), signifying steady progress towards normalcy.

Performance Overview:

Microfinance Universe based loans originated after February 2017

• As on December 31, 2020, the microfinance industry served 5.83 crore unique borrowers, through 10.50 crore loan accounts. The overall microfinance industry currently has a total loan portfolio of INR 2,32,648 crores, and is showing steady improvement, rebounding to the pre-covid levels.
• Gross loan portfolio (GLP) as on December 31, 2020, showed an increase of 10.1 per cent YoY over INR 2,11,302 crores as on December 31, 2019
• 14 Banks hold the largest share of the portfolio in micro-credit with a total loan outstanding of INR 97,956 crores, which is 42.10 per cent of total micro-credit universe. NBFC-MFIs are the second largest provider of micro-credit with a loan amount outstanding of INR 72,128 crores, accounting for 31.00 per cent to total industry portfolio. SFBs have a total loan amount outstanding of INR 39,062 crores with a total share of 16.79 per cent. NBFCs account for another 9.06 per cent, and other MFIs account for 1.04 per cent of the Universe.
• In terms of regional distribution of GLP, East and North East accounts for 41 per cent of the total NBFC-MFI portfolio, South 27 per cent, West 14 per cent, North 11 per cent and Central contributes 8 per cent.

MFIN NBFC-MFIs Members

·         Gross Loan Portfolio (GLP) of NBFC-MFIs stood at INR 74,712 crores as on December 31, 2020, a 11.1 per cent YoY rise as compared to INR 67,255 crores as on December 31, 2019 and by 5.0 per cent in comparison to INR 71,147 crores as on September 30, 2020

·         The GLP includes owned portfolio of INR 63,710 crores and managed portfolio of INR 11,002 crores.

·         As on December 31, 2020, NBFC-MFIs, on an aggregated basis, have a network of 14,437 branches with 1,14,733 employees.

·         Loan amount of INR 19,696 crores was disbursed in Q3 FY 20-21 through 57.8 Lakhs accounts, as compared to INR 10,617 crores disbursed in Q2 FY 20-21 through 32.26 Lakh accounts.

·         Average loan disbursement per account for Q3 FY 20-21 stood at INR 34,070  which is an increase of around 19 per cent in comparison to Q3 FY 19-20 at INR 28,620

·         NBFC-MFIs received a total of INR 10,876 crores in debt funding, which is 10.4 per cent higheras compared to INR 9,854 crores in earlier quarter Q2 FY 20-21, signifying improving liquidity

·         Total equity of the NBFC-MFIs grew by 16.6 per cent to INR 18,077 crores as on December 31, 2020 as compared to INR 15,508 crores in December 31, 2019

• Five top states in terms of loan amount outstanding for MFIN Members are Tamil Nadu, Karnataka, Bihar, Maharashtra and Odisha. They account for 51% of GLP and Top 10 states account for 82 per cent of the total loan amount outstanding.

New Delhi: Microfinance Institutions Network (MFIN), the microfinance industry association and an RBI recognized self-regulatory organization, today released the 36^th issue of its Micrometer report for October to December 2020 i.e. Q3 FY 2020-21 quarter.

Speaking on the occasion, Dr Alok Misra – CEO & Director, MFIN said, “It is heartening that the green shoots seen at the end of Q2 have proved to be true and sector disbursements are reaching almost at pre-COVID levels backed by increased demand for loans to restart livelihoods. The disbursements during Q3 20-21 are around 96% of Q3 19-20, indicating that it should reach normal levels by end of Q4 20-21. The lenders and investors continue to show full confidence on the sector as evident by the debt funding going up 10.4 per cent as compared to the previous quarter and equity moving up 16.6 per cent compared to corresponding quarter last year. The portfolio quality, despite geographical variation is also moving in 88-92% range, the best in financial sector. All this has been done following COVID protocols down to field level and increased use of technology.”

Dr Misra also added, “It is important to note that despite the humongous challenge, when most industries were pruning jobs, MFIs have been strengthening their head count at every level. I feel that the recent statement by the RBI Governor that regulatory framework for microfinance for all lenders active in this space would be reviewed and a discussion paper will be place for public comments by Mid March, adds to the positivity for future sustainable growth of last mile financial inclusion. It is noteworthy that MFIN has been strongly advocating this for last few years and has also worked on Code of Responsible Lending covering all lenders.”