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Gross Microfinance Loan Portfolio Increases 24% in FY24: Report – SME News
The gross loan book (GLP) or outstanding book of the microfinance sector as on March 31, 2024, increased by 24.5 percent to 4.33 lakh crore from Rs 3.48 lakh crore as on March 31, 2023, said the Microfinance Industry Network (MFIN), the industry association for NBFC-MFIs (non-banking financial companies – microfinance institutions) in India on Monday.
The industry served 7.8 million unique borrowers through 14.9 million loan accounts. NBFC MFIs had the largest share in the outstanding loan amount of 1.7 lakh crore, accounting for 39.4 percent of the total industry portfolio followed by banks with total outstanding loans of 1.4 lakh crore, 33.2 percent of total microfinance.
Small finance banks (SFBs) had a total outstanding loan amount of Rs 74,278 crore with a share of 17.1 percent, while NBFCs accounted for 9.3 percent and other MFIs had 0.9 percent. According to MFIN, active microfinance loan accounts increased by 15.4 percent as of March 31, 2024, from 13 million as of March 31, 2023.
“The consistent growth of the microfinance sector continued this year as well. The sector’s portfolio grew 25.4 percent year-on-year. Banks that reported slow 4.5% portfolio growth last year reported a much healthier 20.9% growth this year. NBFC MFIs, on the other hand, reported a relatively lower growth of 23.6% in portfolio this year compared to 37.7% last year,” said Alok Misra – CEO and Director, MFIN.
In terms of portfolio quality, portfolio delay between 31 and 180 days (DPD) has improved for banks and NBFCs. PAR (Portfolio at Risk) 31-180 DPD for banks improved from 2.7 percent on March 31 last year to 2.2 percent on March 31, 2024 and for NBFCs, it improved from 0.9 percent to 0.4 percent.
In contrast, DPD PAR 31-180 for NBFC-IMF deteriorated from 1.5 percent on March 31, 2023 to 2 percent on March 31, 2024. Also for SFB, it deteriorated from 2.2 percent to 2.9 percent.