Page 6 - Microfinance

MFIs set for better days, as collection improves, loan sales jump

Microfinance players have already come out of the massive hit they took during the pandemic and are likely to report lower credit cost by the end of this fiscal, as growth momentum is on an upswing, says a report. India Ratings has revised the outlook on the microfinance sector to 'improving' from 'neutral' and has also maintained the 'stable' rating outlook for FY24. It expects the sector to notch up high double-digit growth of 20-30 per cent, on improved collections and disbursals. It sees the credit cost to improve to 1-3 per cent from 1.5-5 per cent this fiscal. Microfinance institutions have already absorbed the impact of the pandemic by the December quarter, India Ratings said in a note on Wednesday. It expects the growth momentum to continue in FY24, as disbursements are picking up, which in turn will lead to higher growth. According to India Ratings, there are two key risks for the microfinance sector over the next 12-18 months -- inflation and elections. These may impact

By March, we'll be closer to pre-Covid levels: ESAF Small Finance Bank MD

Thomas says the bank expects to bring the microfinance portfolio down to 60 per cent of its book

Microfinance attracts renewed attention after RBI's interest rate cap move

Within months of the RBI lifting the interest rate cap on such loans, the industry is seeing a steady rise in borrowing, especially among women in some of India's poorest districts

Focus on core business, entering banking space on hold: Satin Creditcare MD

Disbursement figures rising, pain of pandemic over for microfinance sector: H P Singh

Securitisation volumes see over 40% YoY uptick in 9-month of FY23: Crisil

The commercial vehicle segment witnessed 31 per cent growth and microfinance segment saw 14 per cent growth in the securitisation market

Outstanding microfinance loan portfolio to rise 20.3% in FY23: MFIN

Outstanding loan portfolio of the micro-finance institution (MFI) sector across India will increase around 20.3 per cent at Rs 3.25 lakh crore in 2022-23 compared to the previous fiscal, said the MFIN, a self-regulatory organisation (SRO) recognised by RBI. During the last fiscal, the total outstanding of the MFI sector was Rs 2.7 lakh crore, and the sector had created around 1.32 crore jobs in the country since 2000, Micro-Finance Institution Network (MFIN) CEO Alok Misra said on Tuesday. "The MFI sector's outstanding for the current fiscal will be around Rs 3.25 lakh crore. There will be a 20.3 per cent rise over the previous fiscal year," Misra told reporters here on Tuesday. The collection efficiency ratio of the sector during the pandemic of 2021 and 2022 had been affected as group gatherings did not take place properly. "But the collection efficiency ratio at present has increased to 97 per cent for the sector from 70 per cent during the pandemic," Misra said. According to a

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

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

Customer protection the core of new RBI microfinance rules: Dy governor Rao

These measures, along with a cap on repayment obligations and steps to check over-indebtedness introduced by the regulator, will eventually bring down interest rates for the borrowers, he says

MFI loans decline in June qtr; NPA situation improves, says report

The June quarter witnessed a marginal decline in the overall microlending outstanding on a sequential basis, but there was an improvement in the asset quality, a report said on Tuesday. There was a 0.2 per cent decline in the overall microfinance book to Rs 2.85 lakh crore during the three months to June when compared with the number as of March-end, the report by CRIF High Mark said. The micro loans were up 18 per cent when compared with the year-ago period, the report by the credit information company added. The April-June quarter last year, which saw the devastating second wave of the pandemic, had led to a massive impact on microlenders both from loan growth as well as delinquency perspective. The June quarter saw Rs 49,788 crore of loans being disbursed, which was 39.2 per cent lower than what was achieved by the industry in the preceding March quarter, but 88.9 per cent higher than the year-ago period, the report said. The value delinquency for loans overdue for over 90 days

Having more than one SRO is good for business: Sa-dhan CEO Jiji Mammen

'Multiple SROs mean a greater number of watchful eyes'

Ujjivan SFB reports 44 % YoY growth in advances in Q2, loan book expands

Lender reports 45% growth in deposits to Rs 20,389 crore at the end of the quarter

Microfinance disbursements slowed in Q1 FY23 after new regulations: MFIN

Lenders needed time to make policy changes after norms were updated in March 2022, says industry group

Expansion and advancement of Prayatna

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Microfinance loans grow 24% YoY in Q1 of FY23; credit quality stable

Fund flow to the sector has improved but some smaller MFIs still find it difficult to access finance from banks

Microfinance loan securitisation grows over two-fold YoY in Q1FY23

Better recoveries, adequate credit enhancements spark investor confidence

Macro challenges of micro lenders

The freedom to fix interest rates has encouraged a few MFIs to jack up rates on Day One. It will take a while for borrowers to get the benefit as products, processes and digitisation evolve

ADB and HSBC India establish $ 100 mn guarantee plan for microcredit

ADB and HSBC programme will help women running small businesses and microfinance institutions lending after the pandemic.

Stress in 30 plus day dues in micro-loans declines in December quarter

Disbursements take a knock on Omicron concerns