NBFC-MFIs witness 40% YoY increase in equity investments: MFIN Report
New Delhi, May 26 (KNN) The Non-Banking Finance Company-Microfinance Institutions (NBFC-MFIs) have witnessed a growth of 40% in equity investment in FY 2017-18 as compared to FY 2016-17 and clocked at Rs 9,631 crore, according to the Micrometer report by Microfinance Institutions Network (MFIN).
The report was released by Giriraj Singh, Minister of State for Ministry of MSME during the first edition of ‘MFIN Microfinance Awards 2018: In Pursuit of Excellence’, industry awards instituted to commemorate micro-finance entities in the country.
The company also witnessed a growth of 50% in Gross Loan Portfolio in FY 2017-18 as compared to the previous year and was Rs 48,094 crore as on 31 March 2018.
Speaking on the occasion Giriraj Singh said, “Microfinance plays an important role to fill the credit gap that exists despite the presence of moneylenders and banks.”
The sector has been instrumental in improving India’s GDP and nobody can deny its contribution in rural economy, he added.
Sharing the journey of MFIN and its growth, Harsh Shrivastava, CEO, MFIN said that the investor’s confidence in the sector has increased which is clearly reflected in the increase in equity investments during the last financial year.
This is an encouraging sign for many medium and small microfinance institutions that are planning to expand their reach and operations, he added.
Further, he added that the industry has registered a healthy annual growth and portfolio at risk percentage has also improved significantly as compared to previous year. We can say that these are the portents of the next growth phase for the industry.
In the financial year 2017-18, the NBFC-MFIs disbursed 268 lakh loans of total worth Rs 59,629 crore which was 49% higher than the FY 2016-17, the report said.
Further, the report highlighted the increase of 25% YoY in number of clients and NBFC-MFIs had 2.53 crore clients as of 31st March 2018.
Average loan amount per account also witnessed an increase of 19% which stood at Rs 22,273.
In terms of regional distribution of portfolio (GLP), East and North East accounts for 44% of the total NBFC-MFI portfolio, South 20%, North 14%, West 11% and Central contributes 11%.
Entire microfinance industry that includes NBFCs, NBFC-MFIs, Banks, Small Finance Banks and non-profit microfinance institutions witnessed growth of 27% as compared to FY 2016-17, according to micrometer report.
The total Gross Loan Portfolio of the industry stood at Rs 1, 36,633 crore. Banks hold 38% share of portfolio in micro-credit with total loan outstanding of Rs 50,418 crore, it further stated.
NBFC-MFIs as a group remain the second largest provider of micro-credit with a share of 28% in total industry portfolio.
Small Finance Banks have a total loan amount outstanding of Rs 30,019 crore with total share of 27%. NBFCs account for 6% and non-profit microfinance institutions account for 1% of the microfinance universe.
Microfinance Institutions Network (MFIN) is the premier industry association and Self-Regulatory Organisation (SRO) for the microfinance industry in India and seeks to work closely with regulators and other key stakeholders to achieve larger financial inclusions goals through microfinance.