The early delinquencies price in microloans remained 6% greater than the pre-pandemic level for the duration of the third quarter of this fiscal, though it enhanced by more than 7% from the second quarter. States like West Bengal, Assam, Odisha and Maharashtra had been facing maximum re-payment strain, according to credit bureau CRIF High Mark.
Releasing the Microlend Report, a quarterly update on the microfinance lending landscape in India, on Thursday, CRIF stated, “High re-payment stress has continued from the previous quarter with PAR (portfolio at risk) 31-180 reaching 12.7%, having maximum stress in West Bengal, Assam, Odisha and Maharashtra.”
The report stated early delinquencies by worth (PAR 1-30 DPD) lowered by 7.4% coming into December 2020. NBFC-MFIs, banks and tiny finance banks (SFBs) witnessed higher early repayment strain in rural markets compared to urban.
“Eastern states of Assam and West Bengal witnessed very high stress with PAR 31-180 DPD reaching 23.1% and 22.8%, respectively coming into December 2020. PAR 180+ stood higher for Assam (7.9%) and Maharashtra (7.6%) compared to other states as of December 2020,” CRIF observed.
West Bengal and Assam, hit by the dual influence of the pandemic and organic calamities, have witnessed maximum repayments strain as of Q3FY21. The Assam Microfinance Institutions (Regulation of Money Lending) Bill, 2020 has been introduced to regulate operations of microfinance institutions (MFIs) and ease strain in the sector.
Notably, collection efficiencies for microfinance players fell sharply in Assam in January right after passing of the Bill by the state Assembly in December final year and talks of a achievable waiver of microloans ahead of the state elections. Around 47% of banks’ MFI portfolio is concentrated in eastern area, followed by 14% in south and 12.5% in west, CRIF added.