Microfinance loans grew 26 percent in Q1

DELHI: The business of Indian non-banking finance companies-microfinance institutions (NBFCs-MFIs) has grown 26 per cent during the first quarter of the current fiscal over the same quarter of last year, according to a latest industry report.
Microfinance loans grew 26 percent in Q1
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Chennai

“NBFCs-MFIs have registered 26 per cent growth year-on-year in the first quarter (Q1) of financial year (FY) 2017-18,” the Microfinance Institutions Network (MFIN) - the self-regulatory body of the Reserve Bank-regulated NBFCs-MFIs - said in a statement here on Tuesday, releasing its latest Micrometer report on the industry.
“The size of the microfinance industry stood at Rs 106,823 crore in Q1 FY18. NBFC-MFIs’ share in the micro credit business stands at 31 per cent with loan portfolio of Rs 32,820 crore,” it said. Banks have become the largest provider of micro-credit with a loan outstanding of Rs 38,486 crore and 36 per cent share, it added.
“There has been a decline of debt funding by 20 per cent year-on-year,” the report said.
“The increase in loan amount disbursed registered 21 per cent growth year-on-year,” MFIN Chief Executive Ratna Vishwanathan said.
The report, however, said due to delay in repayments after the demonetisation of high-value currency last November, there was a sudden deterioration in portfolio quality.
“Portfolio at risk numbers have also seen improvement which shows that NBFC-MFI business is slowly returning to normalcy. However, we will have to wait for another few quarters as we expect it to come back to pre-demonetisation level of under one per cent by that period,” Vishwanathan said. NBFC-MFIs witnessed a growth of 19 pc in number of clients, which stands at 2.08 crore towards the end of the Q1 of this fiscal, MFIN said.

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