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The microfinance industry expects disbursements to bounce back to pre-Covid levels by the third quarter of this fiscal and growth to start coming in by Q4FY22 backed by a steady improvement in demand. The industry has already come back to nearly 90 per cent of pre-Covid levels in terms of disbursements in the second quarter of this fiscal.
According to Alok Misra, CEO and Director, MFIN (Microfinance Institutions Network) there has been an improvement in collection efficiency and if there is no further lockdowns due to Covid-19, which looks unlikely at the moment, the industry should be back on track by March 2022.
“In July-September quarter, we have achieved 90 per cent of the pre-Covid levels in terms of disbursements. We expect that in Q3, this will bounce back to pre-Covid levels and then there will be further improvement in disbursements in Q4 this fiscal,” Misra told BusinessLine .
Microfinance loan disbursals during Q2 of this fiscal improved significantly to ₹64,899 crore as compared to ₹31,261 crore in same period last year. The number of loans disbursed during the quarter also increased to 1.85 crore as against 88 lakhs last year.
GLP growth
The gross loan portfolio (GLP) of the overall microfinance industry grew 5.16 per cent to ₹2,43,737 crore as on September 30, 2021 compared to ₹2,31,778 crore as on September 30, 2020.
As on September 30, 2021, the microfinance industry served 5.65 crore unique borrowers through 10.52 crore loan accounts, the MFIN report said.
The GLP of NBFC-MFIs grew 15.45 per cent to ₹81,408 crore as on September 30, 2021 as compared to ₹70,512 crore a year ago.
On the recovery front, though there were some markets such as Assam and West Bengal which continue to have lower collection efficiency (marginally less than 90 per cent), some other States including Bihar, UP and parts of South India have seen collection efficiency close to 94-95 per cent, Misra said.
It is to be noted that nearly 65 per cent of the microfinance portfolio is concentrated in east, northeast and south regions. West Bengal has the highest average loan outstanding per unique borrower of ₹51,648 followed by Assam at ₹46,300.
“Collections have crossed 90 per cent but some specific states like Assam and West Bengal it is lower. But now even Assam is improving and we see overall collection efficiency improving further,” he said.
(With inputs from Surabhi in Mumbai)
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