Lenders saw their gross loan portfolio (GLP) in the microfinance segment fall 4% year on year (YoY) in the course of the quarter ended June as the second wave of Covid took a toll on loan development. Industry association Sa-Dhan mentioned in spite of the ongoing pandemic, the microfinance sector witnessed a disbursement of Rs 25,820 crore by all lenders, even though on a sequential basis, the GLP was down 14%. The combined GLP of microfinance institutions (NBFC-MFIs), banks, tiny finance banks (SFBs), not-for-profit (NFP) MFIs and other NBFCs stood at Rs 2.14 lakh crore as on June 30, down from Rs 2.49 lakh crore as on March 31, 2021.
P Satish, executive director, Sa-Dhan, mentioned even though the disbursements in the course of Q1FY22 had been larger compared to the corresponding period of FY21, the business enterprise of the sector faced big challenges amid lockdowns. “Small MFIs bore the major brunt as access to funds from banks was restrained. However, I must say that we have seen a recovery in microfinance operations since July,” Satish mentioned.
On a Y-o-Y basis, banks witnessed about 4% development in GLP, although SFBs saw a decline of about 14% in GLP. The highest development in terms of GLP was seen in the NFP MFI segment, which clocked 15% development, although NBFCs recorded a 22% decline in their microfinance GLP. NBFC-MFIs witnessed a decline of about 5%. Banks held a 44% marketplace share in the microfinance segment at the finish of June, followed by NBFC-MFIs, which held a 32% share.
Sa-Dhan mentioned the sector typical of the portfolio at danger (PAR), exactly where repayments have been overdue for more than 30 days, stood at 17.16%. Fourteen states and Union Territories — Lakshadweep, Kerala, Assam, Andaman & Nicobar Islands, Manipur, Meghalaya, Chhattisgarh, Mizoram, Karnataka, West Bengal, Tamil Nadu, Madhya Pradesh, Pondicherry and Nagaland — have a PAR 30+ worth larger than the sector typical.