Microfinance sector GLP crosses Rs 90 billion mark by 2015-end
Microfinance bank's increasing penetration in the local market witnessed a fruitful result in the outgoing year of 2015 as the penetration of the sector surged to 13.7 percent with Gross Loan Portfolio (GLP) record a colossal addition of Rs 26.23 billion to cross the mark of Rs 90 billion.
According to statistics of Pakistan Microfinance Network (PMN), the overall GLP of the microfinance sector increased to Rs 92.991 billion by end of 2015 from Rs66.761 billion recorded by end of 2014-end.
All indicators witnessed positive growth with different rates depicting trend of the industry and its customers getting involved in the banking system at micro level.
In 2015, the number of active savers increased to 13.95 million from 8.75 million showing a growth of 5.2 million.
On the contrary, the growth of active borrowers was very limited by 0.63 million to stand at 3.75 million from 2014 to 2015.
The number of policy holders on the network of microfinance bank increased by nearly one million to 4.75 million in the same year. The amount under sum insured also grew massively by Rs 21 billion to Rs 81.3 billion by end of 2015.
The number of branches or point of sales increased to 2,960 across the country from 2,538 in the year 2015.
According to PMN, in the fourth quarter of calendar year 2015 witnessed growth in all key indicators with the gross loan portfolio of the sector increasing by 9.5% to cross Rs 90 billion. The growth in microcredit outreach was primarily fueled by the MFB peer group whose active borrowers and GLP increased by 5.0% and 13.5% respectively.
Khushhali Bank (KBL) and APNA Bank (AMFB) were the largest contributors to GLP - both banks increasing their loan books by Rs 1.6 billion and 1.3 billion respectively. The increase by KBL can be attributed to larger loan sizes driven by their MSME product line. AMFB, on the other hand, initiated operations in eleven new districts of Punjab, along with a focus on increasing loan sizes. In terms of active borrowers, the largest contribution came from Akhuwat which financed 42,000 new clients - primarily in the services and manufacturing sector - and expanded its outreach to cover 78 districts as compared to 72 districts in the previous quarter. During the same quarter, the share of individual lending methodology increased from 34% to 41%, depicting a growing preference of individual lending over group lending.
The sector PAR (>30 days) declined from 1.6% to 1.4% in the current quarter as a result of write-offs by MFBs.
In terms of savings, the value of savings posted considerable growth of 21%, whereas, the number of active savers grew modestly by 4.5%. MFBs were the sole contributors to the value of savings by adding Rs 11.1 billion worth of deposits in the current quarter.
The average deposit balance of the MFB peer group also increased by 18% in the current quarter - from Rs 5,000 to Rs 5,900. Waseela Bank (WMFB) witnessed the greatest increase in the number of depositors (by 39%), mainly driven by its branchless banking platform. Among the non-bank MFPs, only NRSP witnessed a significant increase in active savers by adding 343,000 new savers in the provinces of Sindh and Punjab.
Micro-insurance also exhibited a positive trend in the fourth quarter of 2015 - policy holders increased by 4% while the sum insured depicted an increase of 6%. Contribution to micro-insurance was, again, dominated by the MFB peer group, as most banks offer built-in micro-insurance product to every credit client. KBL was the largest contributor to micro-insurance among MFBs whose policy holders increased by 23,400 and sum insured by Rs 1.9 billion. Among MFIs, Akhuwat witnessed the greatest increase in both, policy holders (by 42,000) and sum insured (by Rs 0.9 billion).
The sector continues to be dominated by only two types of insurance policies; health and credit life, each maintaining a market share of 49% and 50% respectively.
The penetration rate of the sector increased only marginally from 13.3% to 13.7% in the current quarter. However, the total number of branches increased by 200 (primarily in the region of Punjab and Sindh) due to an increase in outlets by Akhuwat (88), AMFB (39) and NRSP (28).