With 37%, NBFC-MFIs hold the largest share of small loans in rural areas

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The demand for small loans in rural areas has been robust, driven by the sharp increase in the total outstanding loan portfolio of microfinance institutions (MFIs).

According to the latest data from the Microfinance Institutions Network (MFIN), a national body of NBFC-MFIs in the country, the total loan amount increased by 51% to 1,46,741 crore as of September 30, 2018, compared to the corresponding amount. quarter of the previous fiscal year.

Of this total, NBFC-MFIs hold the largest 37% share in microcredit, with total outstanding loans of 54,018 crore, followed by banks with ₹ 48,200 crore, representing 33%. The number of active loan accounts increased 27 percent from the same period last year. Individual players such as Bharat Financial Inclusion (BFIL) have also reported a significant addition of clients. For example, BFIL added 10.5 lakh of customers in the second quarter, up from 6.3 lakh a year ago.

In terms of regional portfolio allocation (GLP), the East and North East regions account for 36% of the total portfolio, followed by South India at 26%, while North India and the West India each represents 15%. The remaining 8 percent comes from central India.

The average amount of loans disbursed per account in the second quarter was 25,070 yen, an increase of 7% from the first quarter of the current fiscal year.

According to BR Diwakar, CFO of Creditaccess Grameen, the driving force behind the growth in loan demand as well as disbursements is the “huge” unmet demand for micro-loans.

“Most of the micro-lending segment is shifting from informal to formal sources, which also drives growth, besides the ability of NBFC-MFIs to raise required capital through equity and debt,” a- he declared. Activity area. According to MR Rao, CEO and Managing Director of BFIL, the gross growth of the loan portfolio was mainly driven by customer acquisition.

Agri, manufacturing

Loans to agricultural and related activities made up a large share of the gross loan portfolio at 53 percent, followed by trade and services, manufacturing and production pooling at 42 percent.

With household financing accounting for only 4 percent of loans, the use of loans for productive purposes has been confirmed.

Another strong trend is the cashless disbursement of loans. Of the 44 MFI-NBFCs, 29 reported more than 90 percent cashless disbursements, while 24 of them made 100 percent cashless disbursements.


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