Home / Finance / News / Competition brews in MFI sector, paving way for consolidation

Competition brews in MFI sector, paving way for consolidation

Over-leveraging signs already there; consolidation likely as regular banks get into the segment

Premium

Last Updated : Feb 06 2017 | 1:41 AM IST

While microfinance institutions (MFI) are yet to tide over the impact of currency demonetisation, intense competition and reports of over-borrowing have surfaced as new grey areas.

At least two recent reports, one by CRIF High Mark and another by ICRA, say MFIs are showing signs of over-leveraging.

CRIF High Mark says of about 42 million unique MFI customers, six per cent have loans with more than two lenders. And, a third of these customers have active loans with more than two non-bank MFIs (NBFC-MFIs). Further, the report says, 70 per cent of such borrowers have three or more loans;

What you get on BS Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Pick your 5 favourite companies, get a daily email with all news updates on them.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Preferential invites to Business Standard events.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.

VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in