The microfinance industry witnessed 24 percent growth in the first quarter of the current financial year, compared to the corresponding period last year, shows recent data from Sa Dhan, the association of community development finance institutions.
While all types of lenders in the microfinance sector witnessed double-digit growth, NBFC-MFIs contributed the most to the expansion. NBFCs witnessed the maximum growth of 54.62 percent, while NBFC-MFIs, SFBs and Not-For-Profit MFIs (NFPs) recorded growth of 35.18 percent, 27.66 percent and 20.71 percent respectively.
“The sector has overcome the difficulties of the pandemic and is now on track. Although it was busy in implementing the new RBI regulations during Q1, it has clocked a healthy growth. Though funds flow to the sector has improved, still some smaller MFIs find it difficult to access funds from banks. We are working towards removing this gap,” said Jiji Mammen, ED & CEO, Sa-Dhan.
Total disbursement of all lenders rose by more than two times compared to the previous year. During Q1 (April’22 – June’22), the total disbursement stood at Rs 57,842 crore, up from Rs 27,328 crore in the corresponding quarter of the previous year. But, disbursement is down around 35 percent compared to the previous quarter, as lenders were fine-tuning their disbursement policy in accordance with the new regulations. However, there has been a significant rise in the average ticket size of the loans disbursed — they were up more than 11 percent for the microfinance sector between June 21 and June 22.
As mentioned in the study, recovery has improved compared to the previous quarter, reaching almost 99 percent in some states. However, there are still certain geographies like Assam where collection is below normal at 50-55 percent.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
