Microfinance loan portfolio grows 21% to ₹3.93lakh cr
Creating awareness among borrowers, reaching untapped regions will be crucial
The microfinance industry’s loan portfolio grew robustly at 21 per cent as of December 2023 to touch ₹3.93lakh crore, according to latest data compiled by SaDhan .
According to this RBIapproved Self Regulatory Organisation (SRO), Microfinance Institutions (MFIs) continued to occupy the largest share in the pie, with 40 per cent, followed by banks at 32 per cent, and SFBs at 18 per cent, NBFCs at 11 per cent, and nonprofit MFIs at 0.18 per cent.
BOOM TIME
“Microfinance sector is on a boom with overall improved performance in every parameter. This growth story has been continuing for the last two quarters and expected to continue for a few more years,” Jiji Mammen, ED & CEO, SaDhan said.
He also said that microfinance needs to be expanded to other geographies, which are not fully served at present.
SaDhan has taken the lead in identifying issues pertaining to unreached geographies by launching a study with the support of Small Industries Development Bank of India (SIDBI). The study report is expected soon and will be made available to the public. Another challenge is the need to create awareness among the micro borrowers. SaDhan, with the support of the DEA Fund of the RBI, conducted 2,250 workshops across the country in 19 States covering 1.42 lakh persons and imparting such training.
MICRO LENDERS
SaDhan is also working to promote microenterprises among selfhelp groups (SHGs) and joint liability group (JLG) members. A project is being implemented to develop one million enterprises in the country, Mammen added.
As of December 2023, the number of loans accounts serviced by all micro lenders stands at 14 crore accounts, up 9 per cent yearonyear. For the third quarter that ended December 31, 2023, the total disbursement of all microlenders grew 19 per cent at ₹96,754 crore.
The top five states in terms of portfolio are Bihar (₹58,706 crore), Tamil Nadu (₹53,304 crore), Uttar Pradesh (₹40,770 crore), Karnataka (₹37,427 crore), and West Bengal (₹35,431 crore). These States account for about 57 per cent of the industry’s total portfolio.
There has been a significant increase among the major States in terms of portfolio (yoy growth) Uttar Pradesh has recorded 38 per cent growth, followed by Bihar at 35 per cent, Karnataka at 30 per cent, Tamil Nadu at 25 per cent, and Odisha at 24 per cent, respectively above the industry average of 21 per cent, while West Bengal has registered modest growth of 8 per cent.
The number of districts having portfolio greater than ₹2,000 crore has significantly increased from 14 on December 2022 to 30 as of December 2023. The majority of these districts are from Bihar (12 districts), West Bengal (6 districts), Tamil Nadu (5 districts) and Karnataka (4 districts).