Ramann sees some signs of easing stress in the sector
The Indian microfinance industry was resilient during COVID-19 with 18% growth year-on-year, according to “Microfinance Plus”, a quarterly publication by Small Industries Development Bank of India (SIDBI) and Equifax.
Portfolio outstanding in aspirational districts as on 31 March 2021 has grown 185% from December 2017. From the overall industry’s gross loan portfolio, 80% was contributed by top 10 states and West Bengal has the highest outstanding portfolio.
This edition of Microfinance Pulse brings out a comprehensive state profile of the state of Karnataka. Also, the report highlights the impact of Covid-19 on the four geographic zones (North, South, West, East) of the country in terms of disbursals and average ticket sizes.
Key highlights:
• The book size of microfinance industry as on 31 March 2021, is Rs.249,277 crore, Y-o-Y growth of 18% from March 2020 to March 2021.
• Microfinance industry disbursed loans worth Rs.93,100 crore during Jan-Feb-Mar 21.
• Banks have registered the highest Y-o-Y growth of 36% in portfolio outstanding, with consistent increase in market share.
• 90+ delinquencies for the sector stood at 4.12% as on 31 March 2021 vs 0.86% as on 31 March 2020.
• The portfolio outstanding of Karnataka stood at Rs.20,330 crore, an increase of 16% from March 2020 to March 2021. Except Karnataka, 90+ delinquency of all the top 10 states has increased in March 2021 compared to March 2020.
• The zone wise market share analysis in terms of disbursement amount shows that the East zone contributed 45% in total disbursement amount in Jan-Feb-Mar 2021, highest among all zones.
“Despite the Covid-19 crisis, the Microfinance portfolio outstanding has shown an impressive Y-o-Y growth of 18%, along with 26% growth in disbursement in JFM’21 as compared to Jan-Feb-Mar’20,” SIDBI Chairman and Managing Director Sivasubramanian Ramann said in a release on 11 Aug 2021.
“The 90+ delinquency levels which has shown a sharp increase to 4.96% in December 2020 have also moderated to 4.12% in March 2021, showing some signs of easing stress in the sector. Going ahead, the lenders need to carefully monitor the accounts to avoid further deterioration in asset quality,” said Ramann.
“It is heartening to see the resilience of the Microfinance sector in view of Covid-19 and lockdown related challenges,” said K M Nanaiah, Managing Director, Equifax Credit Information Services Ltd and Country Leader, Equifax India and MEA.
Microfinance Pulse aims to provide insights on trends in the Indian Microfinance industry – from disbursements to delinquencies to top growing states and top loan categories.
As a global data, analytics, and technology company, Equifax plays an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence.
Small Industries Development Bank of India has been established under an Act of the Parliament in 1990. SIDBI is mandated to serve as the Principal Financial Institution for executing the triple agenda of promotion, financing and development of the Micro, Small and Medium Enterprises (MSME sector) and co-ordination of the functions of the various Institutions engaged in similar activities. #finance #investment #banking #economy /fiinews.com
