Page 5 - Microfinance Industry

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,

Microfinance institutions' profitability to rise to 2.7-3% this fiscal

Lower credit cost on the back of better collections and asset quality, as well as higher pricing of new loans will help standalone microfinance institutions this fiscal to report higher profitability, which is likely to improve to 2.7-3 per cent, says a report. Microfinance Institutions (MFIs) have recouped from the pandemic and have clawed back market share leadership from banks. They closed FY23 with a 40 per cent market share, 600 basis points higher than the previous year while banks saw their share declining to 34 per cent from 40 per cent in FY22. Icra Ratings, in a report on Monday, said MFIs are likely to report a growth of 24-26 per cent in loan sales this fiscal and 23-25 per cent in FY25 when they are also likely to see a further spurt in profitability to 3.2-3.5 per cent. MFIs profitability stood at 2.1 per cent in FY23. Profitability of these institutions is likely to improve to 2.7-3 per cent in FY24 and 3.2-3.5 per cent in FY25. This is expected on the back of an ...

Fusion Micro, Spandana: Rally in MFI stocks has more legs, say analysts

Analysts expect the sector to see strong loan growth in FY24 and FY25 driven by increase in ticket sizes, strong customer acquisitions, and regulatory tailwinds

NBFCs in focus; Five Star, M&M Finance, CreditAccess rally up to 10%

According to Incred Research Services, their interactions with various MFI branches and experts indicate consistency in disbursement growth, primarily led by a surge in new customer acquisition

Microfinance loans grow 21.3% YoY to Rs 3.5 trn in FY23, says report

New regulatory norms have helped industry clocking robust demand

Muthoot Microfin expects 50% of its collections to come digitally by Sept

The third largest microfinance lender Muthoot Microfin expects 50 per cent of its collections to come digitally by September, up from 34 per cent now. The Kerala-based lender from the Muthoot Pappachen Group, collected as much as Rs 1,000 crore or 34 per cent of its entire collection digitally as of March, which was only Rs 168.30 crore in the previous fiscal. Its monthly collections average at Rs 550 crore now. "For the first time our digital repayments have crossed Rs 1,000 crore in FY22 -- Rs 1,088 crore to be precise, which is 34 per cent of our total collections -- which is a growth of 547 per cent on-year. Already our loan disbursals are only done digitally. And we want to take this to at least 50 per cent by September this year, chief executive Sadaf Sayeed told PTI over phone. The microlender expects to disburse 25-30 per cent more loans this fiscal, taking its assets to around Rs 12,000 crore, on the back of a 47 per cent growth in the just-concluded fiscal. The company ..

CreditAccess Grameen rallies 6% on hopes of strong earnings growth

Analysts believe the company is well positioned to capture huge untapped opportunity in MFI space via deeper penetration in new, existing geographies and increase in customer base.

Fusion Microfinance sees asset growth moderating as pent-up demand tapers

Expects to NIMs to improve to 11.3-11.5% from 10.3%

Default rate in microfinance sector declining, post-pandemic: Report

Karnataka and Tamil Nadu are the states with the highest percentage of outstanding loans from micro finance followed by Bihar, Uttar Pradesh and Madhya Pradesh

Cabinet clears Rs 2,600 cr scheme to promote RuPay debit card: Officials

The Cabinet on Wednesday approved a Rs 2,600 crore scheme for promoting RuPay debit cards and low-value BHIM-UPI transactions. Under the scheme, banks would be provided financial incentives for promoting Point of Sale (PoS) and e-commerce transactions using RuPay and UPI in the current financial year. It would help in building a robust digital payment ecosystem. The scheme would also promote UPI Lite and UPI123PAY as economical and user-friendly digital payments. "Cabinet approves the incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (Person-to-Merchant)," said an official tweet.

BS BFSI Insight Summit 2022: SFB leaders discuss big dreams of small banks

Here is the list of leaders from Small Finance Banks on panel for the BS BFSI Insight Summit 2022

Microfinance loans grow 11% to Rs 71,916 crore in Q2 FY23: Report

Microfinance loans in the country grew by nearly 11 per cent to Rs 71,916 crore during the second quarter of the current fiscal, industry data showed. Microfinance loans worth Rs 64,899 crore were disbursed during the same period a year ago. In terms of volume, a total of 1.81 crore loans were disbursed during Q2 FY2022-23, as against 1.85 crore loans in Q2 FY2021-22, as per the latest report by Microfinance Institutions Network (MFIN). According to the MFIN Micrometer Q2 FY2022-23 report, the country's microfinance loan portfolio stood at over Rs 3 lakh crore at end-September 2022, serving 6.2 crore unique borrowers with 12 crore loan accounts. "The overall microfinance industry currently has a total gross loan portfolio (GLP) of Rs 3,00,974 crore as on September 30, 2022... an increase of 23.5 per cent year-on-year over Rs 2,43,737 crore as on September 30, 2021," the report said. Of the total micro loans outstanding, the largest share of 37.7 per cent is held by 13 banks, amoun

Street Signs: Buy the dip, microfinance sector seen turning a corner & more

Microfinance stocks are likely to benefit from a rise in credit demand. According to analysts, the microfinance industry has captured only 28.5 per cent of the total addressable market

New guidelines for financial influencers under works, says Sebi

Merely giving disclaimers may not guard finfluencers from regulatory action

Microfinance sector grows over 16-fold to Rs 2.85 trn in last decade: Study

The microfinance industry grew over 16-times in the last decade with a loan portfolio of Rs 2.85 lakh crore, a study has said. Going forward customer engagement and protection will lay ground for the long-term sustainable growth. According to the 'Micro Matters: Macro View - India Microfinance Review FY 2021-22' report by Microfinance Institutions Network (MFIN), NBFC-MFIs (microfinance institutions) were the only regulated entity offering micro loans till 2012. The portfolio of the industry grew by 16.5-times from Rs 17,264 crore in March 2012 to Rs 2,85,441 crore as of March 2022. Banks and NBFCs started disbursing micro loans from 2016 while small finance banks (SFBs) joined in 2017. The functioning of MFIN as an SRO (self-regulatory organisation) since 2010 has enabled the sector to build its growth on strong pillars such as customer protection, industry code of conduct and policy advocacy, all of which contribute towards the building a responsible finance ecosystem, Devesh ...

We're moving away from volatile corporate bulk deposits: RBL Bank MD & CEO

In a Q&A, R Subramaniakumar dwells on the lender's strategy to fuel growth in credit cards and microfinance, and plans to mop up deposits in an increasingly difficult market

After RBI missive, FIDC asks NBFCs to revise codes of conduct

Has asked them to insert penalty cause for repeated breaches