The microfinance industry's gross loan portfolio (GLP) marginally declined by around 4 per cent to Rs 2,14,528 crore as of June 30 this year, against Rs 2,24,205 crore as of June 20, 2020, according to a report by Sa-Dhan.
Sa-Dhan is an RBI recognised self-regulatory organisation for microfinance institutions. Despite the ongoing pandemic, the sector witnessed disbursement of Rs 25,820 crore by all lenders, though a quarter-on-quarter GLP was down 14 per cent, the quarter 1 report on the microfinance sector released by Sa-Dhan on Monday showed.
As of March 31, 2021, the GLP stood at Rs 2,49,333 crore. On a year-on-year basis, while banks witnessed around four per cent growth in GLP, small finance banks (SFBs) saw a decline of around 14 per cent.
The highest growth in terms of GLP (y-o-y) belonged to the not-for-profit (NFP) MFIs, which clocked around 15 per cent growth, the report showed. NBFCs witnessed around a 22 per cent decline in their GLP and NBFC-MFIs saw a dip of around 5 per cent.
Just about when we were coming out of the impact of COVID-19, the second wave struck. Though we had higher disbursement during Q1 of the current fiscal compared to the same period of previous fiscal, the business of the sector faced major challenges with full and partial lockdowns, Sa-Dhan's executive director P Satish said in the report.
Small MFIs bore the major brunt as access to funds from banks was restrained, he said. However, there has been a recovery in microfinance operations since July, Satish said.
The report said the top five states in terms of GLP are West Bengal, Tamil Nadu, Bihar, Karnataka and Uttar Pradesh. It said there are 14 states/UTs (Lakshadweep, Kerala, Assam, Andaman & Nicobar Islands, Manipur, Meghalaya, Chhattisgarh, Mizoram, Karnataka, West Bengal, Tamil Nadu, Madhya Pradesh, Pondicherry and Nagaland) with a portfolio at risk (PAR) 30+ value higher than the industry average of 17.16 per cent.
Sa-Dhan has 229 members reaching out to 33 states/UTs and 593 districts. It includes SHG promoting institutions, MFIs (for-profit and not for profit), banks, rating agencies, and capacity building institutions.
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