NBFC-MFIs witnesses 24%growth YoY: MFIN Report

NBFC-MFIs’ aggregate Gross Loan Portfolio stood at Rs 38,288 Cr in Q2 FY18
Chandigarh, November 21, 2017: Non-Banking Finance Company-Microfinance Institutions (NBFC-MFIs) have witnessed a growth of 24% over Q2 FY16-17. According toMicrometer report released by Microfinance Institutions Network, the first RBI appointed Self-Regulatory Organisation (SRO) for NBFC-MFIs and an industry association, the aggregate Gross Loan Portfolio of NBFC-MFIs stood at Rs 38,288 Cr in Q2 FY17-18.

NBFC-MFIs disbursed 63.1 lakhloans in Q2FY17-18 which has increased by 2% as compared to the corresponding period during last year but is 15% higher than the loans disbursed over last quarter of the current financial year. As witnessed during the last quarters, Portfolio at Risk (PAR), which was adversely impacted by demonetization earlier this year, is gradually reducing. In line with this gradual decrease, PAR>30 came down to 5.41% in Q2FY17-18 from 9.78% in Q1FY17-18. Similarly, PAR>90 stood at 5.19% in Q2FY17-18 as compared to 7.08% in Q1FY17-18. According to Ms Ratna Vishwanathan, CEO, MFIN, “We are witnessing a growth in loan disbursements as compared to last quarters which reflects that the industry is now returning to normal. It is also important to note that NBFC-MFIs are now increasingly integrating digital modes for disbursements and collections which will help them mitigate logistical issues related to cash handling to some extent. With decreasing percentage of Portfolio at Risk and improvement in disbursements, we expect the industry to show better growth figures in the coming months.”

The loan amount disbursed during Q2FY17-18 increased by 18% and stood at Rs 13,853 Cr as compared to Rs 11,734 in Q2 FY16-17. In fact, 54% of these disbursements were done in cash-less mode, mostly through direct transfer to the customer bank accounts. Average loan amount disbursed per account has also witnessed an increase of 15% in Q2FY17-18 over the corresponding quarter of the last year and was Rs 21,971.

During Q2 FY 17-18, NBFC-MFIs received a total of Rs 8,338 Cr in debt funding from Banks and other Financial Institutions. This represents a growth of 138% compared to Q2 FY 16-17. In terms of regional distribution of portfolio (GLP), South accounts for 29% of the total industry portfolio, North for 27% and East and West for 22% each.

Total loan portfolio of overall microfinance industry stood at Rs 111,539 Cr in Q2FY17-18. Banks are the largest provider of micro-credit with a loan outstanding of Rs 40,076 Cr, accounting for 36% of total micro-credit lending. This includes both direct lending as well indirect lending through BC partnerships. NBFC-MFIs as a group are the second largest provider of the micro-credit with a loan amount outstanding of Rs 35,939 Cr accounting for 32% to total industry portfolio. Small Finance Banks have a total loan amount outstanding of Rs 28,261 Cr with share of 25%. NBFCs account for 6% and Non-profit MFIs account for 1% of microfinance universe.