MFI loan portfolio sees double-digit rise in Q3

Gross delinquencies also increase substantially

The gross loan portfolio of micro lenders has grown in double-digits in the December quarter over the previous quarter, but gross delinquencies have also moved up.

The gross loan portfolio (GLP) of all lenders recorded a growth of 16 per cent during the December quarter to Rs

2,27,893 crore compared with Rs 1,96,820 crore in the year-ago quarter. The GLP of all lenders in the previous quarter, September 2020, was marginally higher at Rs

2,27,843 crore.

However, delinquencies during the OctoberDecember period reached disturbing levels of 13 per cent, higher than the postdemonetisation levels.

As per data from Sa Dhan, portfolio at risk for more than 30 days, or PAR30, has deteriorated to

13.23 per cent from 4.48 per cent in September 2020 and 1.89 per cent in June

2020. PAR-30 was just 1.78 per cent in March 2020.

PAR-60 has moved up

8 per cent and PAR-90 to 4.9 per cent in the December

2020 quarter. Even during the post-demonetisation quarters, delinquencies were much lower. In the quarter ended March 2017,

PAR-30 was 10.56 per cent.

PAR-180, which technically is a non-performing asset, had moved up from

1.23 per cent in March 2017 to 6.7 per cent in the September quarter and

6.14 per cent in December quarter of 2017.

In 2017, in the aftermath of the demonetisation, liquidity of the borrowers was badly affected. Further, the rumours about loan waivers had affected the collections, which eventually led to large-scale write-offs of micro loans then.

However, Sa Dhan believes that things might not move to such a level this time. "The economic recovery has started happening and the collections have improved. Further, the micro finance industry had put up better checks and balances to avoid such a situation," said Somesh Dayal, associate director, Sa-Dhan.