Demonetisation effect: Microfinance NPAs remain elevated in many states

Another cause can be traced to the loan waivers announced by these state governments

Almost 18 months after demonetisation was announced, the microfinance sector continues to suffer, as a substantial portion of its loan portfolio in some states remains at risk. At national level, the portfolio at risk (PAR) — value of loans in arrears — for delinquencies of more than 30 days (PAR>30) was almost 6 per cent at the end of December 2017, up from 0.3 per cent at the end of September 2016. It had soared to 14.1 per cent at the end of March 2017. 

In Maharashtra, Uttar Pradesh (UP), Haryana, Madhya Pradesh (MP), Punjab and Rajasthan, PAR remains well