Microfinance sector sees 3x rise in disbursement value in Q1: Report

However, 1-179 days past due delinquency increased in June 2021 to 31.44%, from 13.59% in March 2021

The microfinance industry disbursed loans worth Rs 25,808 crore during the April-June quarter of the current financial year, registering a robust year-on-year growth of 300 per cent by value and 209 per cent by volume, said a quarterly report by Small Industries Development Bank of India (Sidbi) and Equifax India.

The outstanding portfolio of the Microfinance Industry was Rs 2,22,060 crore as of June 2021. However, 1-179 days past due delinquency increased in June 2021 to 31.44 per cent from 13.59 per cent in March 2021. West Bengal, Tamil Nadu, Bihar, Karnataka and Uttar Pradesh were the top 5 states as of June 2021. Tamil Nadu is the second leading state with 90+ delinquency of 2.62 per cent.

Sivasubramanian Ramann, Chairman and Managing Director, SIDBI said, “The disbursement during April-June 2021 quarter has been impacted due to the second wave of the pandemic. However, the impact has been less severe as compared to the first wave of the pandemic, reflecting the resilience of the microfinance sector." He added that though the sector has withstood the challenges, 1 to 29 Days Past Due (DPD) levels and 30 to 59 (DPD) levels have shown a sharp increase, indicating initial signs of portfolio stress.

KM Nanaiah, Country Leader, Equifax India said, “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 per cent share across lenders.”