Loan disbursement by NBFC-MFIs dips 43% to Rs 10,617 crore in Q2

Loan disbursement by non-banking financial companies-microfinance institutions (NBFC-MFIs) declined 43 percent to Rs 10,617 crore in the quarter ended September as against Rs 18,565 crore in the same period of previous fiscal, according to a report by MFIN.

In the quarter ended June 2020, loan disbursement had declined 96 percent to Rs 570 crore from Rs 15,865 crore in the corresponding quarter of the previous fiscal.

The data pertains to NBFC-MFI members of the Microfinance Institutions Network (MFIN), a self-regulatory organisation and industry association of the microfinance industry in the country.

Analysis on NBFC-MFIs is based on data collected from 54 members that are registered with the Reserve Bank of India (RBI).

Average loan amount disbursed per account during Q2 FY2021 was Rs 32,912 which is an increase of around 20 percent in comparison to the corresponding quarter of the last financial year.

"July to September 2020 quarter has witnessed gradual and steady progress in microfinance loan disbursement as also on repayment, compared to earlier April to June 2020 quarter. The full impact is still not seen as September was the first month post moratorium," MFIN CEO Alok Misra said.

Gross loan portfolio (GLP) of NBFC-MFIs stood at Rs 71,147 crore as on September 30, 2020. The GLP includes an owned portfolio of Rs 57,270 crore and a managed portfolio of Rs 13,878 crore.

GLP increased by 12 percent on a year-on-year basis, but contracted by 1 percent in comparison to June 30, 2020, the report showed.

As of September-end, 3.07 crore clients have loans outstanding from NBFC-MFIs, which is an increase of 4 percent over the number of clients as on September 30, 2019.

During July-September quarter, NBFC-MFIs received a total of Rs 9,854 crore in debt funding, which is 4 percent higher than in the year-ago quarter, and 65 percent more as compared to April-June FY2021.

Other banks contributed to 48.8 percent of the borrowings received during Q2 FY2021, followed by 19.5 percent from non-bank entities, 15 percent from top five banks, 14.3 percent from all India financial institutions (AIFIs) and external commercial borrowings (ECB), with other sources contributing the remaining 2.4 percent, the report said.

As on September 30, 2020, NBFC-MFIs, on an aggregated basis, have a network of 14,080 branches with 1,09,521 employees, it said.