Page 4 - Microfinance Industry

MFI CreditAccess reports rise in stress in Q2; collection efficiency dips

The collection efficiency, including arrears, declined to 96.2 per cent in Q2 FY25 from 97.9 per cent in Q1 FY25

CreditAccess Grameen share price hit 52-wk low on weak Q2 disbursements

The fall in CreditAccess Grameen share price came after the company's disbursements dropped 19% annually to Rs 4,004 cr in Q2FY25, from Rs 4,966 crore in Q2FY24.

Why have microfinance stocks hit 52-week lows today? Check details here

The microfinance industry is currently facing a significant rise in delinquencies, primarily driven by increasing borrower indebtedness, apart from other factors.

Microfinance growth driven more by lenders' loan disbursement than demand

Borrowers are being chased by different kinds of lenders -- universal banks, small finance banks, NBFCs, MFIs and fintechs

Delinquencies in microfinance sector may push NBFC-MFI credit cost: ICRA

Increasing delinquencies in the microfinance sector is likely to push up the NBFC-MFI credit cost to 320-340 bps in 2024-25 from 220 bps in the previous financial year, according to an Icra report. Non-banking financial companies microfinance institutions' (NBFC-MFIs) AUM growth is also likely to moderate to 17-19 per cent in the current financial year from 29 per cent in 2023-24 amid rising concerns about asset quality, it said. The report said the robust growth in the last two years has accentuated concerns about potential overleveraging of borrowers in certain regions. "Further, farmers' protests and the Karz Mukti Abhiyan in certain regions, especially Punjab and Haryana, have impacted collections and the asset quality. "This, along with climatic conditions and operational challenges, including employee attrition, would keep the asset quality under pressure in the near term. As per Icra's estimates, non-performing assets (NPAs) have increased by 30 bps in Q1 FY2025," it ...

Microfinance industry AUM up 22% at Rs 1.4 trillion till June, shows data

The loan amount of Rs 26,223 crore was disbursed in Q1 FY24-25 through 56.8 lakh accounts, including disbursement of owned as well as managed portfolios

CreditAccess Grameen up for sale: Dutch owner seeks $2.7 billion valuation

The Amsterdam-based CreditAccess India B V holds a 66.56% stake in CreditAccessGrameen, and is aiming for a valuation of around $2.7 billion in the potential deal

Budget wishlist: MFIs seek equity support, govt guarantee for bank loans

Sa-dhan has also suggested a special fund for the northeastern states in view of the unrest in Manipur, which has hit micro lenders that extended loans in the state

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

Value of mergers and acquisitions at lowest level in at least 76 months

With 98 deals, the total value of M&A stood at $1.8 billion. In the same month last year, the value was $8 billion across 204 deals

India Ratings lowers MFI sector outlook to 'neutral' from 'improving'

Flagging caution on overleveraging, the rating agency revised the outlook on the microfinance sector to 'neutral' from 'improving'

NBFC-MFIs post 80% growth in net profit at Rs 1,105 cr for Q3 FY24

High credit offtake; interest rate hikes boost bottomline

RBI slams microfinance institutions for charging higher rates to borrowers

In 2021, the RBI had given full freedom to entities on interest rates to be charged for microloans by lifting the interest rate cap of 24 per cent put earlier

Fusion Micro Finance Q3 results: Profit rises 23% to Rs 126 crore

Fusion Micro Finance on Monday reported a 23 per cent increase in net profit to Rs 126 crore in the third quarter ended in December 2023 aided by higher interest income. The microfinance entity had earned a net profit of Rs 102 crore in the same quarter a year ago. Its total income increased to Rs 613 crore in the quarter against Rs 467 crore in the year-ago period, Fusion Micro Finance said in a regulatory filing. The interest income improved to Rs 540 crore from Rs 420 crore in the same quarter of the previous financial year. Net interest income (NII) increased 36 per cent to Rs 337 crore from Rs 248 crore in the same quarter a year ago. Its asset under management (AUM) grew by 24 per cent to Rs 10,026 crore compared to Rs 10,693 at the end of December 2023. The Gross Non-performing Assets (NPAs) of the company declined to 3.04 per cent as compared to 3.69 per cent at the end of December 2022.

Fusion MicroFinance plans to cut its bank funding share to 55-60%

The first focus for the Gurugram-based BSE listed lender is to bring down the share of bank funding in resources to 76-77 per cent in the near term

Microfinance sector lent Rs 3.48 trn in FY23, NBFC-MFI topped: Report

NBFC-MFI and banks comprise 73.90% of total lending by microfinance institutions

Microfinance sector's disbursements up 30% in Q1FY24, shows data

Lenders raise concern over attempts to harm credit culture

Securitisation activity unaffected by HDFC merger, surges 35% in H1: CRISIL

Securitisation volumes have grown 35 per cent to over Rs 1 lakh crore in the first half of the current fiscal, domestic ratings agency Crisil said on Thursday. The overall volume of securitisation -- wherein one lender bunches up a loan or a set of loans and passes on the future receivables to another financier against an upfront payment -- had stood at Rs 75,000 crore in the April to September period, it said. It attributed the jump in activity to banks' continued interest in retail assets, and strong credit growth among originating Non-Banking Financial Companies (NBFCs). The volume remained unfazed by the exit of a large housing finance company (HFC) from the securitisation space in the second quarter of this fiscal, following its merger with an affiliate bank. "The exit of one of the largest originators last quarter has been more than made up by other financiers. The overall first-half volume is now trending in line with pre-pandemic levels when the FY20 volume had touched Rs 1

As indebtedness rises, microfinance industry has amber lights switched on

MFIs are now the largest providers of micro-credit with loans outstanding of Rs 1,42,245 cr at end-May 2023

Assam CM launches third phase of microfinance loan waiver scheme

Assam Chief Minister Himanta Biswa Sarma on Saturday rolled out the third phase of a scheme to waive microfinance loans availed by women of the state, benefitting over 2.23 lakh borrowers. Under this phase of the Assam Micro Finance Incentive and Relief Scheme 2021 (AMFIRS), borrowers whose loan accounts turned into non-performing assets would be offered an outstanding principal balance of up to Rs 25,000. "With a total relief cost of Rs 291 crore under this category, the state's womenfolk will once again be able to avail fresh loans for their continued prosperity," Sarma said at an official function here. Altogether 2,22,949 borrowers will benefit from this scheme, he said, adding that the lending institutions will waive the accrued interest and penalties for these women and give them 'no due' certificates immediately. Expressing his gratitude towards the microfinance institutions for agreeing to waive around Rs 300 crore in interest income under the category-III relief measures,