For the first time since the crisis Andhra Pradesh in Oct 2010, microfinance institutions have shown growth in Gross loan portfolio and disbursements. Notably, West Bengal has emerged as a new destination of south-based MFI in Bengal.
In the last quarter, Andhra Pradesh-based MFIs disbursed Rs 1850 crore, which is 27 per cent rise in loan amount disbursed over Q3 FY 11-12. Over the last quarter, when MFIs in Andhra Pradesh disbursed Rs 1778 crore, the growth was 4 per cent, according to MFIN MicroMeter, the quarterly publication by Microfinance Institution Network (MFIN).
The growth comes from expansion of the operations of Andhra Pradesh-based MFIs in other states, especially West Bengal, Bihar and UP.
Notably, this week, a division bench of the Andhra Pradesh high court, comprising chief justice Pinaki Chandra Ghose and justice Vilas V. Afzalpurkar, dismissed petitions filed by SKS and other MFIs seeking to quash the Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Act, 2011.
The microfinance operations in Andhra Pradesh had come to a halt after the state government issued an ordinance on October 15, 2010, which put restrictions on fresh lending and borrowing.
"The reason for growth in the MFI portfolio in Andhra Pradesh signifies the growth of the MFIs in other states. However, in Andhra Pradesh, the business is at standstill," said Puli Kishore Kumar is the promoter and CEO of Trident, an MFI based in Andhra Pradesh.
In terms of gross loan portfolio, the Andhra Pradesh-based MFI saw a decrease of 4 per cent over the same period last financial year, but saw an increase of 4 per cent over the second quarter of the present financial year.
During the last quarter, FY 12-13, the MFIN registered institutions disbursed Rs 6194 crore, with non-Andhra Pradesh MFIs contributed to around 70 per cent of disbursements in the quarter.
Eastern and Northern India emerge as new hubs of MFIs
With the crisis in the microfinance sector in Andhra Pradesh nowhere near end, West Bengal, Bihar, UP and Tamil Nadu have emerged as fastest growing market for the microfinance sector. West Bengal, now has the largest branch network of MFIs, accounting for over 15 per cent of the all India branch network. After the crisis in Andhra Pradesh, West Bengal-based Bandhan had replaced SKS as the largest MFI in the country.However, Tamil Nadu has the presence of largest number of MFIs. Maharashtra, MP, Karnataka, Gujarat, Uttar Pradesh and Bihar are other major states in terms of number of MFIs. Top five states�"Andhra Pradesh, West Bengal, Tamil Nadu, Karnataka and
Maharashtra-- account for 68 per cent of the portfolio.Notably, SKS Microfinance's net profit rose to Rs. 1.2 crore for the third quarter ended December 2012, mostly due to its expansion in states outside Andhra Pradesh.
The company had posted a loss of Rs. 428 crore in the same period a year ago.
As of 31st Dec, 2012, members of MFIs had 9,198 branches spread across 26 states. While branch network continued to shrink for the industry, 14 MFIs expanded their branch network, as compared to Q3 FY 11-12, according to the report.
Over 18,000 employees lost their jobs due to impact of AP crisis, 63% of them being loan officers. There was a further reduction in the staff employed by the MFIs, mainly due to lay-offs by AP MFIs.
