Stress in 30 plus day dues in micro-loans declines in December quarter

Disbursements take a knock on Omicron concerns

The stress on micro loans seems to be on the wane with a decline in portfolio at risk in 30 plus days past dues (DPD) bucket to 9.2 per cent in December 2021 from 10.4 per cent in September 2021. The write-offs also declined from 5.1 per cent as of September 2021 to 4.4 per cent as of December 2021, according to CRIF Highmark report.  

The 30 plus DPD was at 15 per cent in March 2021 and 9.5 per cent in December 2020.

However, loan origination-suffered in the quarter due to concerns over Omicron surge. The loans disbursed were 14.7 million in the third quarter ended December 2021, down by 21 per cent over loans disbursed in the quarter ended September 2021. The decline was 23.5 per cent on a year-on-year (YoY) basis. The loan origination in the reporting quarter was Rs 57,600 crore originations, down sequentially by 11.8 per cent and 6.8 per cent Y-o-Y basis.

CRIF High Mark in its quarterly publication MicroLend said the surge in Covid-19 cases in India associated with the Omicron variant, has impacted micro lending in Q3FY22, marked by a decline in disbursements. However, lenders are hopeful that the recent extension of the Emergency Credit Line Guarantee Scheme for another year will provide the necessary fillip to the microfinance sector in the coming months.

The portfolio outstanding of the Microfinance sector was at Rs 2.63 trillion as of December 2021, showing 5.9 per cent q-o-q and 10.4 per cent y-o-y growth, it added.