Net interest margins (NIMs) of micro-finance institutions (MFIs) would be under considerable pressure as competition rises in the sector, a study by KPMG has said.
“As the competitive intensity for MFIs increases, the pressure on NIM will increase considerably. So, the need for the MFIs to focus on non-interest income/credit plus products becomes very important.”
MFIs can additionally enhance penetration of insurance in general and life insurance sectors with simple, contextual and small-ticket products, based on segment needs. In the last three years, MFI players have grown their disbursements at a CAGR of almost 50%.
