MFIs' total loan portfolio grows 5% to Rs 2.6 trn as on March 2022: Report

Microfinance industry loan portfolio grew by 5 per cent year-on year to Rs 2,62,598 crore in the fiscal ended March 2022, according to a report by Sa-Dhan released on Tuesday.

In the year-ago period, the same stood at Rs 2,50,826 crore.

Sa-Dhan is an RBI recognised Self Regulatory Organisation (SRO) for microfinance institutions.

In the last quarter of fiscal 2022, the industry's total loan portfolio registered a growth of 13 per cent.

Sa-Dhan Executive Director P Satish said the sector is showing signs of recovery after being in turmoil for around two years.

"Though it is a long and arduous journey for the sector to bounce back to its old glory, timely intervention by the government and the RBI in matters pertaining to policy and financial packages have helped the industry to a great extent," he said.

Positive growth is expected in the first quarter of the current fiscal and the trend to continue throughout the current fiscal, Satish added.

Despite around 5 per cent y-o-y growth in the total portfolio, the portfolio of banks decreased by 7 per cent to Rs 1,02,527 crore as of March 31, 2022.

NBFC-MFIs loan portfolio grew by 19 per cent to Rs 94,096 crore as of end March.

Total disbursement declined by 6.84 per cent to Rs 85,667 crore in Q4 FY22.

The report said that while funds flow to the sector has improved, small MFIs are struggling in accessing funds from banks.

In Assam, banks have almost stopped lending to homegrown (those having headquarters in Assam) MFIs.

Overall, collection efficiency has improved to 95-99 per cent but the recovery is not uniform across the states/UTs. Collection efficiency in Assam is lowest at 60-65 per cent, the report added.

As of 31 March 2022, Portfolio at Risk (PAR) 30+ improved to 5.27 per cent from 8.77 per cent in third quarter. PAR 60+ improved to 3.55 per cent in Q4 FY22 from 5.64 per cent in Q3 FY22.

PAR 180+ improved to 9.40 per cent from 9.60 per cent in Q3 FY22.

Broadly, PAR indicates loans that are at risk.