Microfinance loan portfolio stands at Rs 2,32,648 cr as of Dec-end: Report

The microfinance industry's gross loan portfolio (GLP) grew 10.1 per cent to Rs 2,32,648 crore as on December 31, 2020, according to the data collated by industry body Microfinance Institutions Network (MFIN).

The industry's GLP had stood at Rs 2,11,302 crore at the end of December 2019.

The association said 14 banks hold the largest share of the portfolio in micro-credit with a total loan outstanding of Rs 97,956 crore followed by non-banking financial companies-microfinance institutions (NBFC-MFIs), with a loan outstanding of Rs 72,128 crore.

Small finance banks (SFBs) have a total loan amount outstanding of Rs 39,062 crore with a total share of 16.79 per cent. NBFCs account for another 9.06 per cent, and other MFIs account for 1.04 per cent of the microfinance universe, it said.

During the December 2020 quarter, the microfinance industry's loan disbursement de-grew 3.86 per cent to Rs 59,507 crore, from Rs 61,894 crore in the year-ago quarter. On a sequential basis, the industry's loan disbursement saw a growth of 90.4 per cent, the industry body said.

MFIN is an industry association comprising 58 NBFC-MFIs and 39 associates including banks, small finance banks (SFBs) and NBFCs. It released its Micrometer report for the third quarter of fiscal 2020-21.

GLP of MFIN's NBFC-MFI members grew 11.1 per cent at Rs 74,712 crore as on December 31, 2020, compared with Rs 67,255 crore last year in the same quarter. It rose 5 per cent in comparison to Rs 71,147 crore as of the end September quarter.

GLP includes an owned portfolio of Rs 63,710 crore and a managed portfolio of Rs 11,002 crore.

NBFC-MFIs witnessed a 2.9 per cent growth in loan disbursement at Rs 19,696 crore in the third quarter of FY21 as against Rs 19,150 crore in the year-ago period.

However, on a sequential basis, their loan disbursement grew at massive 85.5 per cent. In the quarter ended September 2020, NBFC-MFIs had disbursed loans worth Rs 10,617 crore.

"It is heartening that the green shoots seen at the end of Q2 (second quarter) have proved to be true and sector disbursements are reaching almost at pre-COVID-19 levels backed by increased demand for loans to restart livelihoods.

"The disbursements during Q3 2020-21 are around 96 per cent of Q3 2019-20, indicating that it should reach normal levels by end of Q4 fiscal 2020-21," MFIN CEO and Director Alok Misra said.

NBFC-MFIs' average loan disbursement per account for Q3 FY 2020-21 stood at Rs 34,070, which is an increase of around 19 per cent to Rs 28,620 a year ago, MFIN said.

During the quarter, NBFC-MFIs received a total of Rs 10,876 crore in debt funding, which is 0.5 per cent less than the third quarter of 2019-20 and 10.4 per cent more as compared to second quarter of 2020-21, the report said.

Total equity of the NBFC-MFIs grew by 16.6 per cent to Rs 18,077 crore as on December 31, 2020, as compared to Rs 15,508 crore in the year-ago period, the association said.

"The lenders and investors continue to show full confidence in the sector as evident by the debt funding going up 10.4 per cent and equity moving up 16.6 per cent compared to corresponding quarter last year," Misra said.

Five top states in terms of loan amount outstanding for MFIN members are Tamil Nadu, Karnataka, Bihar, Maharashtra and Odisha. They account for 51 per cent of GLP and top 10 states account for 82 per cent of the total loan amount outstanding.