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The Micro Finance Institutions (MFIs) may be require to raise an incremental of approximately Rs 25,000 crore in the next 12-18 months through a combination of equity, non-convertible debentures and term loans from banks, said Microfinance Institutions Network (MFIN).
“The incremental requirement would be approximately Rs 2,000 crore through equity, Rs 3,000 crore through non-convertible debentures (NCDs) and term loans from banks and financial institutions worth Rs 15,000 to 20,000 crore in the next 12-18 months,” said R Baskar Babu, chief executive officer of Suryoday Microfinance and vice president of MFIN at an event held in Mumbai on Thursday.
The equity portion includes major part through private equity while the NCDs will be mostly done through private placement route.
According to Ratna D Vishwanathan, CEO of MFIN who was also present at the event, the industry will grow by at least 15-20% in terms of portfolios and clients in the next 12-15 months. Vishwanathan added that the number of clients that MFIs have currently is over three crore. The loans portfolio stood at about Rs 40,000 crore at the end of last year.
MFIs have been playing a key role in financial inclusion. The Reserve Bank of India (RBI) is in the process of accessing the applicants for granting license for payments bank and small finance banks which would also help in catering to financial inclusion. It is believed that even if these players emerge in the time to come, there will be opportunities for MFIs in their own space.
