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Outpacing the overall credit growth, microcredit has been witnessing 40 per cent year-on-year growth for the last few months. Much of the growth is being funded by private institutions, according to industry experts.
While banks, both private and public sector ones, themselves are chasing microfinance borrowers for direct loans (apart from indirect loans by on-lending to MFIs) due to low delinquency rates, in the last few months, several non-banking finance companies have also increased lending to MFIs. For most MFIs, debt account for majority of their fund requirement.
According to the data from Reserve Bank of India (RBI), at the
