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Sunday, June 01, 2014

Microfinance Industry stabilizes and grows by a healthy 35% in 2013-2014

During FY 13-14, average loan amount disbursed per account was Rs 14,343 an increase of 12% over the previous fiscal year.
Microfinance Institutions Network (MFIN) released the eighth issue of the MicroMeter© on the status of the Indian microfinance industry, as on 31st March 2014. This issue provides a comparative analysis with the two previous fiscal years (FY12-13 and FY11-12) along with the previous quarter of FY13-14 (Q3 FY13-14).The analysis presented in this issue is based on data collected from 46 MFIN member NBFC–MFIs.

The aggregate Gross Loan Portfolio (GLP) of Micro Finance Institutions (MFIs) stood at Rs 279.31 bn registering a growth of 35%, over the last financial year. NBFC-MFIs (other than those under CDR) grew their GLP by 51%. Medium size NBFC-MFIs (GLP> Rs 1-5 bn) registered highest growth of 57% over FY12-13. Loan disbursals increased by 48% compared to FY 12-13 and stood at Rs 349.68bn. As of 31st March 2014, aggregate clients of NBFC-MFIs stood at 28 mn – growth of 20% over FY 12-13

During FY 13-14, average loan amount disbursed per account was Rs 14,343 an increase of 12% over the previous fiscal year. Amount disbursed per account has increased across all the NBFC-MFIs, large, medium and small. NBFC-MFIs received total debt funding Rs 150.30 bn, 79% from the banks and rest from other Financial Institutions (FIs). Corresponding figures in FY 12-13 were Rs 101.15, 85% from the banks, showing an increase of 49% in FY 13-14.

As of 31st March, 2014, PAR for NBFC-MFIs (other than MFIs under CDR) remain well under 1% of GLP. Maharashtra with 22 NBFC-MFIs, has maximum number of NBFC-MFIs operating in India. West Bengal ranks first in terms of GLP closely followed by Tamil Nadu. West Bengal, Tamil Nadu, Andhra Pradesh, Karnataka and Maharashtra are the top 5 states accounting for 58% of the portfolio.

Samit Ghosh, President, MFIN observed that “The microfinance industry has stabilized and grew by a healthy 35%. MFIN has implemented responsible lending by strictly ensuring the Reserve Bank of India’s guidelines on extension of credit. The discipline of extending every loan based on satisfactory credit history of over 25 million customers has resulted in reducing the risk of over lending & substantially improved the portfolio quality of the entire industry. The recognition by the RBI of the key role of the microfinance in financial inclusion and satisfaction with the quality of operations came with awarding of the coveted banking license to the largest NBFC-MFI in India – Bandhan.”

Commenting on the industry performance, Alok Prasad, CEO, MFIN, said, “The year 2013 - 14 has been truly transformational for the industry. Growth, both in terms of gross loan portfolio and clients has been strong. Portfolio performance is very impressive. Branch network has expanded and new geographies covered. And, the trend lines on practically all operational ratios looking positive. This has been possible through the happy combination of a supportive regulatory environment; the customer centric business model of MFIs; and, the funders continuing to stand by the industry.”

Based on data provided by 41 NBFC-MFIs on insurance & pension, as of 31st March 2014, NBFC-MFIs facilitate life insurance to over 31 mn clients. A total of 15 NBFC-MFIs facilitated opening of pension accounts for their clients. 1.2 mn pension accounts were opened during the year, 28% of them under the government sponsored Swavalamban scheme.