Microfinance loan portfolio jumps to nearly Rs 3.5 lakh cr at March-end; portfolio quality improves: Report

Microfinance loan portfolio jumps to nearly Rs 3.5 lakh cr at March-end; portfolio quality improves: Report

The latest report on Tuesday by MFIN states that the GLP or gross loan portfolio of the microfinance industry increased to Rs. 3.48 lakh crores from Rs. 2.85 lakh crore(by 22 percent) as of March 31, 2023.

MFIN is an association that includes small finance banks (SFBs), banks, and NBFCs of NBFC microfinance institutions.

From a total of Rs 3.20 lakh crore in the December quarter of the prior fiscal year, the GLP climbed by 8.6%.

This comes as a result of both the growth in volume and the number of loans granted. 7.17 crore loans totaling Rs 2.96 lakh crore were paid out during the Financial year 2023 as compared to 6.30 crore loans totaling Rs 2.39 lakh crore during the Financial year 2022 states that the larger ticket size of new loans.

The average loan amount increased to Rs 43,607 in the March quarter of the Financial Year 2023 from Rs 39,990 in the corresponding period the year before. 

82 NBFC-microfinance organizations (MFIs) accounted for 39.7% of the total GLP as of March 31, 2023.

They were the top providers of microcredit among banks in the microfinance sector and with loans outstanding totaling Rs. 1.38 lakh billion.

With a total loan current of Rs. 1.19 lakh crore or 34.2% of the entire micro-credit universe, 13 banks had the second-largest portion of the micro-credit portfolio.

Small financing banks (SFBs), NBFCs, and other MFIs each have a stake of 16.6%, 8.5%, and 1% of the market. 

All microfinance industry loan delinquencies improved as of the March 2023 quarter, with the exception of loans that were still unpaid 180 days after their due dates.

From about 12% on March 31, 2022, the Portfolio at Risk (PAR) over thirty days past due (dpd) or loans not paid for more than thirty days improved to 10.5% as of March 31, 2023; PAR 60+ and enhanced to 10.1% from about 11%; PAR 90+ dpd improved to 9.5% from about 10.3%, and PAR 180+ dpd slightly worsened to 8.6% from about 8.4% during the same period.

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