Microfinance Q3 disbursements at ₹Rs 78,584 crore, AUM grows 25%

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Microfinance loans for the financial services sector grew 24.6 per cent on year to ₹3.99 lakh crore as of December 2023, serving 7.4 crore unique borrowers through 14.6 crore loan accounts.

Also read: Bank credit growth moderates to 16.2% in Jan 2024

1.66 crore microfinance loans worth ₹78,584 crore were disbursed during Q3 FY24, compared with 1.89 crore loans worth ₹77,877 crore in the year ago period, as per data by industry body Microfinance Industry Network (MFIN)’s Micrometer report for Oct-Dec.

“Microfinance operations added more than 1 crore unique clients over the last financial year to its fold. Portfolio delinquency has reached the pre COVID levels which indicates improving health of the microfinance portfolio,” said Dr Alok Misra, CEO and Director, MFIN.

NBFC-MFIs (91 members) continued to be the largest provider of micro-credit with outstanding loan amount of ₹1.6 lakh crore, accounting for 39.1 per cent of the total industry portfolio. Banks, with 13 members, held the second largest share of portfolio of 33.5 per cent with total loan outstanding of ₹1.3 lakh crore. Small finance banks had outstanding loans of ₹70,449 crore and a marker share of 17.6 per cent. NBFCs accounted for another 8.9 per cent, and other MFIs account for 0.8 per cent.

South India is now the largest contributor to the microfinance portfolio contributing 31.14 per cent on the back of steady growth, especially in Telangana and Andhra Pradesh. East and Northeast, which was the leading region in terms of outstanding portfolio, now contributes 31.06 per cent.

On the other hand, portfolio growth in West Bengal slowed down resulting in redistribution of share of portfolio among these regions. Bihar continued to be the largest state in terms of portfolio outstanding followed by Tamil Nadu and Uttar Pradesh, the report said.

NBFC-MFIs

Assets under management of NBFC-MFIs rose 36 per cent y-o-y to ₹1.4 lakh crore as on December 31, 2023, which included owned portfolio of ₹1.2 lakh crore and managed on off-balance sheet portfolio of ₹26,420 crore.

Also read: NBFC-MFIs seek revision in annual household income criteria for giving microfinance loans

Loan amount of ₹34,082 crore was disbursed in Q3 FY24 through 74.6 lakh accounts, compared with ₹28,023 crore of disbursements through 66.4 lakh accounts in the previous year. The average loan amount disbursed per account was ₹45,705, 8.2 per cent higher on year.

NBFC-MFIs, on an aggregate basis, currently have a network of 19,712 branches with 1.75 lakh employees. These entities received total debt funding of ₹21,847 crore during the quarter, up 57.3 per cent from the previous year. Total equity of NBFC-MFIs grew 37.7 per cent to ₹31,825 crore as of December 2023.