MFIN Data Reveals Significant Expansion In Indian Microfinance Industry's Loan Portfolio

New Delhi, Jun 11 (KNN) The Indian microfinance industry witnessed a substantial expansion in its loan portfolio during the financial year 2023-24, according to data released by the Microfinance Industry Network (MFIN), the industry association for Non-Banking Financial Companies – Microfinance Institutions (NBFC – MFIs).

As of March 31, 2024, the sector's gross loan portfolio (GLP) or portfolio outstanding surged by 24.5 percent to Rs 4.33 lakh crore, up from Rs 3.48 lakh crore on March 31, 2023.

This growth underscores the sector's resilience and its pivotal role in providing financial access to underserved segments of the population.

The microfinance sector served an impressive 7.8 crore unique borrowers through 14.9 crore loan accounts during the fiscal year. NBFC-MFIs maintained their dominance, accounting for the largest share of Rs 1.7 lakh crore or 39.4 per cent of the total industry portfolio.

Banks followed closely with a total loan outstanding of Rs 1.4 lakh crore, constituting 33.2 per cent of the overall micro credit.

Small finance banks (SFBs) held a loan amount outstanding of Rs 74,278 crore, representing a 17.1 per cent share, while NBFCs and other MFIs accounted for 9.3 per cent and 0.9 per cent, respectively.

Alok Misra, CEO & Director, MFIN, stated, "Consistent growth of microfinance sector continued for this year as well.”

He also mentioned, “The portfolio of the sector grew by 25.4 per cent on a year-over-year basis.

“Banks, which reported sluggish growth of 4.5 percent in portfolio last year, have reported a much healthier growth of 20.9 percent this year. NBFC-MFIs, on the other hand, reported a relatively lower growth of 23.6 percent in portfolio this year compared to 37.7 percent last year," Misra explained.

On the portfolio quality front, the portfolio delinquent by 31 to 180 days past due (DPD) improved for banks and NBFCs.

The portfolio at risk (PAR) 31-180 DPD for banks improved from 2.7 per cent as of March 31, 2023, to 2.2 per cent as of March 31, 2024, while for NBFCs, it improved from 0.9 per cent to 0.4 per cent.

However, PAR 31-180 DPDs for NBFC-MFIs deteriorated from 1.5 per cent as of March 31, 2023, to 2 per cent as of March 31, 2024. For SFBs, it worsened from 2.2 per cent to 2.9 per cent during the same period.

(KNN Bureau)