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Improved demand, recovery to boost microfinance industry

January 03, 2022

Improved demand, recovery to boost microfinance industry
The microfinance industry in India, which has been reeling under pressure due to the decline in collection efficiency and lower disbursements on the back of the coronavirus slowdown, is expecting be back on track by the fourth quarter of this fiscal backed by a steady demand for credit and improved recuperation.

According to Alok Misra, CEO and Director, microfinance institutions network, there has been an improvement in collection efficiency and disbursements have also been growing slowly.

For the quarter ended September 30, 2021, NBFC-MFIs disbursed close to ₹19,672cr through 54.3 lakh accounts. This is almost 141% higher than the disbursements of ₹8,155cr made during the same period a year ago, when both collections and disbursements had come to a grinding halt due to lockdowns across the nation.

As on 30th September 2021, the industry served 5.65cr unique borrowers through 10.52cr loan accounts. Nearly 65% of the portfolio is concentrated in the East, North East and South regions.

The top 10 states constitute close to 82% in terms of gross loan portfolio. West Bengal retains its spot as the biggest state in terms of portfolio outstanding followed by Tamil Nadu and Bihar. Among top 10 states, West Bengal has the highest average loan outstanding per unique borrower of ₹51,548 followed by Assam at ₹46,300, the MFIN data said.
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