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Microfinance loans up 24.5% to Rs 4.3 trn in FY24, NBFC-MFIs see moderation

The total loan accounts rose to 149 million at the end of March 2024 from 130 million a year ago


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Abhijit Lele Mumbai

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Reflecting buoyant demand for credit, the microfinance loan portfolio of lenders rose by 24.5 per cent year-on-year (YoY) in 2023-24 to Rs 4,33,697 crore, according to Microfinance Industry Network (MFIN) data.

The outstanding Gross Loan Portfolio (GLP) was Rs 3,48,339 crore at the end of March 2023. The Y-o-Y growth was 22.03 per cent in Fy23.

The total loan accounts rose to 149 million at the end of March 2024 from 130 million a year ago.

The microfinance lenders consist of banks, finance companies working as microfinance institutions (NBFC-MFIs), small finance banks (SFBs) and finance companies with a certain portfolio of microfinance loans and others.

Alok Misra, Chief Executive Officer & Director, MFIN in a statement said, “The consistent growth of the microfinance sector continued for this year (Fy24) as well. Banks, which had posted sluggish growth of 4.5 per cent in portfolio last year (Fy23), reported a much healthier growth of 20.9 per cent this year. NBFC-MFIs on the other hand reported a relatively lower growth of 23.6 per cent in their portfolio in Fy24 as compared to 37.7 per cent last year.

NBFC-MFIs were the largest provider of micro-credit with a loan amount outstanding of Rs 1,70,903 crore, accounting for 39.4 per cent of total industry portfolio.

Banks had the second largest share of portfolio in micro-credit with an outstanding portfolio of Rs 1,44,022 crore, which is 33.2 per cent of total microcredit universe.

SFBs had an outstanding microfinance loan book of Rs 74,278 crore with a total share of 17.1 per cent. NBFCs account for another 9.3 per cent and Other MFIs account for 0.9 per cent of the universe.

In terms of regional distribution of GLP, East & Northeast and South account for 62 per cent of the total portfolio. Bihar remained the largest state in terms of portfolio outstanding followed by Tamil Nadu and Uttar Pradesh.

Misra said there was considerable increase in equity of NBFC-MFIs who are members of MFIN.

This additional equity has brought Debt to Equity ratio for them down from 3.6 as on March 31, 2023 to 3.2 as on March 31, 2024. This will allow the entities to leverage and expand their operations in the coming years, he added.

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First Published: Jun 10 2024 | 2:02 PM IST

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