Repaying capacity of borrowers took a hit in Q3FY21, says Infomerics report

Loan defaulter rates or delinquency rates started to increase from Q1FY21 amid the pandemic, according to an Infomerics report.

“The magnitude was more in the “30-59 days past due” category where delinquency rate went to 4.73 per cent till Q3FY21. This delinquency eased to 2.90 per cent by the end of FY21 but shot up to astounding 10.52 per cent in the devastating second wave,” Infomerics said in its industry outlook on MFIs. It further noted that the delinquency rate went up in the “60-89 days past due” and “90-179 days past due” category as well.

Meanwhile, loan portfolio of India’s microfinance industry stood at over Rs 2.37 lakh crore serving 5.68 crore unique borrowers with 10.3 crore loan accounts. This report highlights that the results for Q2FY21 show a reduction in the size of the MFI industry compared to Q1FY21. Gross loan portfolio as on June 30, 2021 showed an increase of ~4.2 per cent year-on-year over Rs 2.27 lakh crore as of June 30, 2020.

Banks held the largest share of the MFI portfolio with a total loan outstanding of Rs 1.02 lakh crore, around 43.14 per cent of the total micro-credit universe as on June 30, 2021. Following closely, NBFC-MFIs were the second largest providers of micro-credit with an outstanding amount of Rs 75,021 crore accounting for 31.61 per cent to total industry portfolio, as per the ratings agency.

SFBs had a total outstanding amount worth Rs 38,624 crore with a total share of 16.27 per cent whereas NBFCs accounted for other 7.89 per cent and other MFIs account for 1.09 per cent. The ratings agency states that Tamil Nadu has the largest state in terms of portfolio outstanding at Rs 35,312 crore, followed by West Bengal at Rs 34,587 crore and Bihar at Rs 26,997 crore respectively. West Bengal had the highest average loan outstanding per unique borrower of Rs 54,159 followed by Assam at Rs 48,697 among the top 10 states.

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