Economy

Microfinance sector sees 47.85% growth in loans

During the period under review, the total number of microfinance loan accounts rose to 9.79 crore from 7.43 crore in the corresponding year-ago period.

During the period under review, the total number of microfinance loan accounts rose to 9.79 crore from 7.43 crore in the corresponding year-ago period.  

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Tamil Nadu ranks first in loan distribution followed by West Bengal and Bihar.

Microfinance Institutions Network (MFIN) witnessed a 47.85% growth in its gross loan portfolio (GLP) in the second quarter ended September to ₹2,01,724 crore.

During the period under review, the total number of microfinance loan accounts rose to 9.79 crore from 7.43 crore in the corresponding year-ago period. MFIN served an estimated 5.46 crore borrowers through 9.79 crore loan accounts.

In the 31st edition of Micrometer (MFIN’s publication) for July-September 2019, MFIN said banks held the largest share of portfolio in micro-credit with a total loan outstanding of ₹80,570 crore representing 40% of the total micro-credit universe.

Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) were the second largest providers of micro-credit with a loan amount outstanding of ₹62,960 crore, accounting for 31% of the total industry portfolio. Small Finance Banks accounted for 17%, NBFCs 11% and other MFIs making up 1%.

In regional distribution of GLP, the east and northeast accounted for 40%, south 28%, north 10%, west 14% and central India 7%. The top 10 States constituted 82.7% in terms of GLP. Tamil Nadu was the largest State in terms of loan distribution followed by West Bengal and Bihar.

“It is heartening that in the last 30 months, an additional 18.3 million women have taken microfinance loans.This growth in unique borrowers is an endorsement of the unstinted trust that small borrowers have reposed in all RBI-regulated microfinance institutions. This is also seen in the strong track record of repayment that microfinance continues to demonstrate,” said Harsh Shrivastava, CEO, MFIN.

Data show that the access to microfinance is rising at a healthy pace nationally and an increasing number of small borrowers across the country are paying back their dues on time. This endorses the fact that microfinance loans are increasingly seen by small borrowers as big economic facilitators, regulated and an organised form of finance over the unregulated forms of availing finance, according to a report in Micrometer.

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Printable version | Dec 13, 2019 9:05:23 AM | https://www.thehindu.com/business/Economy/microfinance-sector-sees-4785-growth-in-loans/article30079371.ece

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