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Microfinance industry standing its ground with flat Y-o-Y growth: SIDBI-Equifax report

11:37 AM Nov 23, 2021 | FPJ Web Desk

The tenth edition of “Microfinance Pulse”, a quarterly publication by Small Industries Development Bank of India (SIDBI) and Equifax India revealed that the outstanding portfolio of the Microfinance Industry has been flat on Year-on-Year (Y-o-Y) basis as of June 2021.

The outstanding portfolio of Microfinance Industry was Rs. 2,22,060 crore as of June 2021.

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Microfinance Industry disbursed loans worth Rs. 25,808 crore during April-June 2021 quarter registering a robust Y-o-Y growth of 300 percent by value and 209 percent by volume. However, 1-179 days past due delinquency increased in June 2021 to 31.44 percent from 13.59 percent in March 2021. West Bengal, Tamil Nadu, Bihar, Karnataka and Uttar Pradesh were the top 5 states as of June 2021.

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West Bengal is the leading state with a portfolio outstanding of Rs. 31,024 crore, however, 90+ day delinquency of West Bengal was 5.15 oercent, which is highest among the top 5 states and also higher than the industry 90+ delinquency of 3.01 percent.

The analysis of borrower distribution by number of loans and portfolio outstanding shows that 42 percent of the customers have three or more loans and only 15 percent of the borrowers have portfolio outstanding more than Rs. 50,000.

On the launch, Sivasubramanian Ramann, Chairman and Managing Director, SIDBI said, “The disbursement during April-June 2021 quarter have been impacted due to second wave of the pandemic. However, the impact has been less severe as compared to first wave of the pandemic, reflecting the resilience of the microfinance sector. Although the sector has withstood thechallenges, 1 to 29 Days Past Due (DPD) levels and 30 to 59 (DPD) levels have shown sharp increase, indicating towards initial signs of portfolio stress and resulting in an alarming overall increase in the DPD levels. Going ahead, the lenders need to carefully monitor the microfinance portfolio to avoid further deterioration in asset quality.”

On the launch, KM Nanaiah, Managing Director, Equifax Credit Information services Pvt. Ltd. and Country Leader, Equifax India and MEA said, “The tenth edition of Microfinance Pulse report in collaboration with SIDBI provides cutting edge analysis to address key questions of practitioners and policymakers. In a tough year, the Microfinance industry stood its ground, by staying flat Y-o-Y with remarkable growth in disbursements in the quarter ending in June 2021. Banks led this disbursement growth story with 57 percent share across lenders.”

Microfinance Pulse aims to provide insights on trends in the Indian Microfinance industry – from disbursements to delinquencies to top growing states and top loan categories. The report is being published in 12 vernacular languages in addition to Hindi and English.

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