Microfinance portfolio jumps by 26% in December quarter, says report

Microfinance portfolio for lenders grew 26 per cent to more than Rs 3.24 lakh crore at the end of the December quarter, an industry body said on Friday.

The micro credit portfolio for all the lenders combined together stood at Rs 2.56 lakh crore in the year-ago period, and Rs 3.04 lakh crore at the end of the preceding September quarter, according to data collected by Sa-Dhan, an association of impact finance institutions.

In the December quarter, the Non-Bank Finance Companies-Microfinance Institutions (NBFC-MFI) segment witnessed a faster growth in portfolio at 43.37 per cent as against 9.23 per cent for banks.

The fastest growth was reported by the NBFCs segment at 59.14 per cent, which helped its overall market share to grow to nearly 8.50 per cent as against 6.69 per cent in the year-ago period.

Sa-Dhan's executive director and chief executive Jiji Mammen said festivities and a resurgent economy helped the industry post a healthy growth in the December quarter.

"The overall mood is positive with a great growth number and good recovery percentage. We need to bring back the confidence of the investors and lenders to support the sector so that the funds would be available at a better term," Mammen added.

On the asset quality front, proportion of loans unpaid for over 90 days have improved to 1.76 per cent from 2.27 per cent as of September. From a loans due for over 30 days perspective, the ratio has improved to 3.43 per cent from 8.77 per cent.

West Bengal, Delhi, Puducherry, Uttarakhand, Punjab, Chhattisgarh, Madhya Pradesh and Rajasthan are among the major states and union territories where the stress is higher than the industry average of 3.43 per cent, Sa-Dhan said in a report.

From a portfolio contribution perspective, Bihar, Tamil Nadu, West Bengal, Uttar Pradesh and Karnataka were the top five MFI markets in the country and account for approximately 55 per cent of the total portfolio, it said.

The average ticket sizes increased to Rs 41,095 for the industry as compared to Rs 39,045 in the year-ago period.