The microfinance sector grew 24.22 per cent year-on-year (YoY) in the third quarter ended December 31,2019, with a gross loan portfolio (GLP) of ₹2,11,302 crore.

The total number of microfinance loan accounts stood at 10.11 core during the quarter, against 8.67 crore in the previous year period, according to industry data released by Microfinance Institutions Network (MFIN), a national body of NBFC-MFIs.

According to Harsh Shrivastava, CEO, MFIN, the industry has reached 30 per cent of the potential households in the country that need microfinance.

Banks at the top

Per MFIN data, banks held the largest portfolio in micro-credit, with total loan outstanding of ₹83,876 crore, in Q3. This was mainly due to the merger of BFIL (formerly SKS Microfinance) with Induslnd Bank during Q1 FY20.

NBFC-MFIs were the second largest providers of micro-credit, with loan amount outstanding of ₹66,159 crore. This was followed by small finance banks (SFBs), with ₹37,282 crore, NBFCs (₹21,591 crore) and other MFIs (₹2,395 crore).

Regional distribution

In terms of regional distribution of GLP, the East and North-East accounted for 40 per cent, South 28 per cent, North 10 per cent, West 14 per cent and Central India, 8 per cent. The top 10 States accounted for 82.5 per cent in terms of GLP. Tamil Nadu continued to hold the largest share, followed by West Bengal and Bihar.

During Q3, NBFC-MFIs received a total of ₹10,960 crore in debt funding, up 16 per cent YoY. The total equity grew 8 per cent to ₹15,567 crore.

As of December 2019, NBFC-MFIs, on aggregated basis, had a network of 13,844 branches and employee base of 1,12,616. The average loan outstanding per account was ₹18,162, up 10 per cent YoY.

The loan amount disbursed via the cashless mode was 90 per cent. Also, 80 per cent of MFI members reported that more than 90 per cent of loans disbursed were through the cashless mode.

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