Microfinance institutions pain on the rise: Explained in four charts

Microfinance institutions (MFI) may have to brace for more pain going ahead. Delinquencies in Q3FY20 were higher than the previous quarter. The portfolio-at-risk (PAR) in the 1-30 due-past-date (DPD) period rose by 60 basis points (bps) to 1.9 per cent over the previous quarter; PAR in the 31-180 DPD rose by 40 bps to 1.5 per cent; while PAR 180+ DPD fell by 10 bps to 4.4 per cent. The overall write-offs in this period stood at 1.4 per cent of the portfolio, 10 bps higher than the previous quarter. What is surprising is banks’ exposure to the MFI sector