Kolkata, March 16 NBFCs-MFIs have overtaken banks to emerge as the largest providers of microfinance services in the quarter ended December 31, 2022.
According to the Micrometer In a report released by MFIN (Microfinance Institutions Network) in the third quarter of FY23, 83 NBFC-MIFs were the largest microcredit providers, with an outstanding loan of Rs 1,23,386 crore, representing almost 39 percent of the total industry portfolio, while 13 banks with a total outstanding loan of Rs 1,14,546 crore or 36 percent of total microcredit loans, had the second largest share.
Small Finance Banks (SFBs) with an outstanding loan of Rs 52,192 crore accounted for a 16 percent share, NBFCs accounted for another 9 percent and other MFIs 1 percent of the total portfolio.
Disbursement of microfinance loans
Microfinance loan disbursements grew by almost 19 per cent to Rs 77,877 crore in the third quarter of FY23, compared with Rs 65,392 crore in the same period last year. About 189 lakhs of loans were disbursed in the quarter, up from 165 lakhs in the third quarter of FY22.
NBFC-MFIs disbursed about Rs 33,786 crore in the third quarter of FY23, compared with Rs 22,884 crore in the same period last year, registering a growth of 47%.
The Gross Loan Portfolio (GLP) stood at Rs 3,20,584 crore as of Dec 31, 2022, up 25% year-on-year on Rs 2,56,058 crore as of Dec 31, 2021. microfinance served Rs 6.4 crore unique borrowers through loan accounts of Rs 12.6 crore.
The NBFC-MFIs’ LPG stood at Rs 1,14,969 crore as of Dec 31, 2022, almost 35% higher than Rs 85,264 crore as of Dec 31, 2021. LPG includes own portfolio of Rs 95,646 crore and a managed portfolio of Rs 19,323 crore.
In terms of regional LPG distribution, the East, Northeast and South accounted for 63 percent of the total portfolio. Bihar was the largest state in terms of outstanding wallets, followed by Tamil Nadu and West Bengal, according to the report.
Microfinance institutions are expanding their reach in states like Bihar and Uttar Pradesh, with potential high demand.
“The regulatory and policy environment remains supportive and the momentum the industry has gained over the past year is favorable. SIDBI’s Udyam Assist platform will provide a further boost to the sector by bringing in informal micro-enterprises that are supported and financed by MFIs,” Dr. Alok Misra, MFIN CEO and Director, said in the report.
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