Microfinance industry to cross Rs 1 trn loan portfolio in Q2 FY20: Report

India's microfinance industry is set to cross Rs 1 trillion loan portfolio during September quarter of the ongoing financial year, according to a report.

The industry witnessed 9 per cent quarter-on-quarter growth in its gross loan portfolio (GLP) to Rs 98,107 crore during April-June 2019-20, said the report by the industry's self regulatory organisation Sa-Dhan.

The data is based on the information provided by 200 microfinance institutions (MFIs).

"FY20 has started on a positive note for the microfinance industry. The industry is set to cross the landmark figure of Rs 1,00,000 crore GLP by Q2 of the current fiscal," said P Satish, Executive Director - Sa-Dhan.

Satish said the MFI industry plays a pivotal role in serving the underserved and unserved sections of the population and it will play a key role in financial inclusion and taking many government schemes to the last mile.

The overall combined micro credit portfolio of all lenders as on June 30, 2019 stood at Rs 1.89 triliion of which NBFC-MFIs have lent Rs 71,850 crore with 38 per cent market share, the report said.

This is followed by banks' lending to the tune of Rs 64,814 crore to the sector with 34 per cent market share.

Small Finance Banks (SFBs) have a portfolio of Rs 31,958 crore constituting 17 per cent share, NBFCs Rs 18,767 crore accounting for 10 per cent and Not Profit MFIs have least portfolio of Rs 1,702 crore constituting 1 per cent share.

As per the report, the average ticket size of microfinance lending by banks is Rs 42,249, SFBs Rs 32,946 and NBFC-MFIs Rs 27,329.

The average ticket size of the sector is Rs 33,511. Sikkim, Dadra & Nagar Haveli, and Nagaland have average ticket size over Rs 50,000, followed by Assam at Rs 45,537; West Bengal Rs 45,274 and Uttarkhand Rs 40,468.

Tamil Nadu, West Bengal, Bihar, Karnataka, and Maharashtra are the top five states in terms of loan portfolio outstanding and active loan accounts, said the report.

The microfinance business in India is spread across 615 districts of the country.