Track up to 29-day dues in micro-loans to contain slippages: Sidbi

Advises caution amid easing of stress, evident from improved collection efficiency

Lenders need to keep close watch on micro loans with delays upto 29 days to avoid further deterioration in asset quality amid easing of stress.

The Covid-19 pandemic, which broke out in March 2020, has severely impacted the Microfinance sector owing to disruption it caused in supply chain & business operations, especially to the low-income group.

As the collection efficiency of the industry improved, the active-loan delinquency buckets are showing improvement in March 2021 compared to December 2020, according to Sidbi.

The 90-day-plus delinquency levels which increased sharply to 4.96 per cent in December 2020 have also moderated to 4.12 per cent in March 2021, showing signs of easing stress in the sector, said Sidbi Chairman and Managing Director Sivasubramanian Ramann.

'Microfinance Plus', a quarterly report by Sidbi and Equifax showed 90-day-plus delinquencies for the sector shot up to 4.12 per cent as on March 31, 2021 from 0.86 per cent as on March 31, 2020.

Except for Karnataka, 90-day-plus delinquency of all the top 10 states has increased in March 2021 from March 2020.

The Microfinance industry portfolio rose 18 per cent year-on-year in FY21 to Rs 2,49,277 crore. From the overall industry’s gross loan portfolio, 80 per cent was contributed by top 10 states and West Bengal has the highest outstanding portfolio.

The portfolio outstanding of Karnataka stood at Rs 20,330 crore, up 16 per cent from March 2020 to March 2021.

The zone wise market share analysis in terms of disbursement amount shows that the East zone contributed 45 per cent in total disbursement amount in Jan-Feb-March of 2021, the highest among all zones, the Sidbi report said.