Mfi

While SFBs have grown rapidly over the past few years, their microfinance portfolios have affected asset quality

The decline in bad loans will be driven by write-offs and tighter lending norms, though credit costs are expected to remain elevated in FY26, says CareEdge Ratings

The fall in new delinquencies in the microfinance industry has slowed, delaying recovery by a quarter, with meaningful earnings growth expected only from Q4 FY26 or FY27

Profitability under pressure due to high credit costs

IDFC First Bank chief says not insuring the microfinance portfolio earlier worsened FY25 losses but confirms that 66 per cent of the book is now covered under CGFMU

Sudipta Roy said that the transfer of the gold business of Paul Merchants Finance will be completed by June 15

IAD also flags ₹595 crore of unsubstantiated balances in "other assets", as whistleblower complaint prompts deep dive into IndusInd Bank's microfinance portfolio

Spocto X and Credgenics are end-to-end debt collection platforms focused on digitizing the entire collection process

Share of overdue loans shoots to 6.4%

The assets under management (AUM) of microfinance institutions (MFIs) in the state stood at Rs 60,000 crore at the end of March 2024

The dealing with internal factors would mean entities require more discipline and emphasis on corporate governance and compliance

In 2022, the RBI updated regulations for MFIs, which now apply to all entities in the sector, including banks, small finance banks, and non-banking financial companies (NBFCs)

Industry-wide stress in the microfinance sector has built up due to unchecked credit growth and multiple loan disbursements to the same customers, resulting in overleveraging among borrowers

Private life insurers dominate the segment, accounting for over Rs 10,708.4 crore, while the state-owned Life Insurance Corporation of India (LIC) contributed nearly Rs 152 crore

The apex bank has asked lenders to strengthen their underwriting standards and collection efforts to limit the conversion of stress into Non-Performing Assets (NPAs)

The study showed almost all microfinance institutions and companies in the oil refining & marketing space have missed estimates

Of the Rs 270 crore worth of loans, around Rs 208 crore are non-performing loans, and the remaining Rs 62.36 crore worth of loans have been written off by the bank

Earlier this month, the RBI barred four NBFCs, including two MFIs, from sanctioning and disbursing loans due to charging exorbitant interest rates to borrowers

The asset quality of the microfinance portfolio deteriorated in Q1 FY25 as the heatwave across the country adversely impacted the income of borrowers and collections

The company reported a net loss of Rs 35.62 crore in June 2024 quarter due to higher than usual provisioning.