NBFC-MFIs overtake commercial banks in micro loan market share in Q2

One reason for this shift in trend could be that banks faced challenges in managing this asset class, especially after the outbreak of the Covid-19 pandemic and the resultant lockdowns

Non-banking financial companies (NBFCs) working as micro finance institutions (NBFC-MFIs) overtook commercial banks in terms of market share in micro loans in the second quarter of financial year 2022-23 (Q2FY23).

To sustain this lead, NBFC-MFIs will need to maintain a year-on-year (YoY) growth rate of over 25 per cent in disbursements, ensure robust underwriting and quality services, said MFI industry executives and analysts.

According to Sa-Dhan, an association of MFIs, the NBFC-MFI market share has dominated the sector for the first time in years with a share of 37.53 per cent, while banks have slipped to second position with a