Overall collection rate of microfinance institutions (MFIs), which was 35-40 percent in April, improved to 65-70 percent in July, according to the industry data collated by industry body, Microfinance Institutions Network (MFIN).
“Collection has picked-up momentum from June. In August collections are expected to be about 80-85 percent. We also observe regional variance in collection due to impact of COVID-19, economic activities, restriction for movement and misleading propaganda of vested interest groups in few pockets,” MFIN said.
Banks continue to dominate the microfinance sector accounting for 41 percent of the loan share of the industry, MFIN said.
Microfinance institutions (MFIs) operating in the form of non-banking finance companies (NBFCs) follow banks with 32 percent market share. NBFC-MFIs typically borrow fund from banks and lend to low-income borrowers.
Banks have a total MFI loan book of Rs 91,942 crore followed by NBFC-MFIs with a loan book of Rs 71,394 crore. The total loan book of microfinance industry grew to Rs 2,24,595 crore as on June 30. The portfolio declined compared with Rs 2,30,165 crore in March.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
According to the association, there are no significant changes in market share among the lenders on a quarter on quarter basis. Market share of Banks and NBFCs has increased slightly whereas market share of NBFC-MFIs, SFBs and Non Profit MFIs has decreased slightly.
On a year-on-year comparison, market share for Banks and NBFCs has decreased by 1 per cent each over the same quarter of last year whereas for NBFC-MFIs and SFBs (small finance banks) have increased by 1 per cent each.
The average ticket size of MFI loans given by banks was at Rs 33,422 while that of NBFC-MFIs is Rs 27,627 and small finance banks was at Rs 25,497.