The Indian microfinance industry recorded a drop of 26 per cent in the number of loans disbursed and a 16 per cent decline in loan amounts disbursed during the third quarter ended December, as compared to the corresponding quarter of the last fiscal, the Microfinance Institutions Network (MFIN) said on Thursday.
"The pulling out of the High-Value Currency Notes (HCVNs) from circulation significantly impacted the microfinance sector, which is 99 per cent cash-driven," MFIN -- the self-regulatory body of the Reserve Bank-regulated non-banking finance companies (NBFCs) and microfinance institutions (MFIs) -- said in a release here.
"The decrease on both disbursement and collection is due to the impact on industry post discontinuance of Rs 500 and Rs 1,000 notes," it said.
"Post the discontinuation of HCVNs with effect from midnight of 8th November, the industry was thrown out of gear initially," said MFIN Chief Executive Ratna Vishwanathan.
"During the whole two months post discontinuing of High-Value Currency Notes, MFIN has had to engage with state governments, at both the ministerial level as well as the bureaucracy, the RBI and extensively with the press, to quell the surge of disinformation with reference to microfinance practices," she added.
According to the body, loans disbursed during the third quarter ended December amounted to Rs 12,424 crore, as compared to Rs 14,707 crore disbursed during the same quarter last year.
However, the microfinance industry grew by 53 per cent year-on-year during the quarter in consideration, the statement said.
The aggregate gross loan portfolio of microfinance institutions stood at Rs 56,634 crore in the quarter ended December 2016, as compared to Rs 36,912 crore in the same quarter of the previous year.
The MFIN also said that 56 per cent of total disbursements during the quarter came from five states -- Karnataka, Tamil Nadu, Maharashtra, Odisha and Bihar.
--IANS
bc/nir
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