Industry sees improvement in disbursements, asset quality and new loan inquiries in the Sep-21 quarter. Unpaid loans that are 30-day overdue have also reduced, says CRIF Highmark. The microfinance industry is emerging from the Covid second wave with improvement in disbursements, asset quality and new loan inquiries in the September quarter.

 

The portfolio outstanding for the industry, which provides small ticket loans to micro-entrepreneurs and women borrowers, increased to Rs 2.49 lakh crore as of September, up 2.1 per cent when compared with the figure in June and 6 per cent when compared with the year-ago period, according to a report by a credit information company.

 

Unpaid loans, which had become a concern because of the economic activity getting affected during the second wave in the April-June period, also seem to be reducing if one were to go by the 30-day overdue period, it said.

 

Inquiries rise
The volume of Inquiries witnessed a good recovery during the quarter as compared to the first quarter of the fiscal, it said. “The second quarter marked a turnaround for the microfinance industry with an increase in disbursements. The report said 4.1 per cent of borrowers have exposure to four or more lenders.

 

Rural growth faster

When it comes to growth, disbursements in the rural markets grew at a faster clip as compared to the urban ones, it said, adding the top-10 states constitute for 83 per cent of the gross loan portfolio as of September 2021.

 

Banks’ share in the overall microlending mix is over 40 per cent despite a faster paced pick up in the non-bank lenders, who now account for a 29 per cent market share and are followed by the small finance banks at 17 per cent.

 

Source: economictimes.indiatimes.com