MICROFIN COs MAY NEED 9,000CR

Mumbai, Oct. 2: The country’s microfinance sector, which rose by 25 per cent in the first quarter, may need ` 6,000- 9,000 crore over the next three years to meet it growth plans, says a report.

According to a report by rating agency Icra, the growth prospects for the microfinance sector remain good and the industry is expected to grow at 20- 22 per cent in the current financial year.

It said while investors continued to support the industry with equity infusion of ` 4,061 crore in FY18 ( approximately ` 6,570 crore in FY17), 87 per cent of the capital was infused in the top 10 lenders in terms of portfolio size.

“The sector would need external capital of ` 6,000- 9,000 crore till FY21 to meet the growth plans,” the report said.

While raising capital is unlikely to be a major impediment for wellmanaged large MFIs/ SFBs, the smaller entities may continue to struggle to raise equity.

“This could result in an increase in the share of smaller MFIs originating more portfolio through the BC model, as partners to larger lenders, to conserve capital,” the report said.