Microfinance, often known as microcredit, is a sort of banking service that provides financial services to unemployed or low-income individuals or groups that would otherwise be unable to obtain them. The ultimate purpose of microfinance is to enable underprivileged individuals to become self-sufficient.
The outstanding portfolio of the Microfinance Industry has grown by 2% Q-o-Q as of September 2021, according to the eleventh edition of the quarterly publication Microfinance Pulse by the Small Industries Development Bank of India (SIDBI) and Equifax India.
As of September 2021, the industry’s outstanding portfolio totalled Rs 2,26,000 crore. During the July-September 2021 quarter, the microfinance sector disbursed loans totalling Rs 66,681 crore, representing a Y-o-Y increase of 96 percent in value and 94 percent in volume over the same quarter in 2020.
Furthermore, 90-day past-due delinquency fell to 2.95 percent in September 2021, down from 3.01 percent in June 2021. As of September 2021, the top five states in terms of portfolio outstanding were Tamil Nadu, West Bengal, Bihar, Karnataka, and Uttar Pradesh.
Tamil Nadu is the most powerful state, having a portfolio of Rs 29,000 crore. Banks have the greatest portfolio outstanding in the business, at Rs 92,000 crore, followed by NBFC-MFIs, which have a portfolio outstanding of Rs 80,000 crore.
“Microfinance has evolved as an important financial delivery channel to achieve financial inclusion,” said Sivasubramanian Raman, Chairman and Managing Director of SIDBI, in a statement. “Because of the pain and loss of livelihoods caused by the pandemic, all stakeholders must refocus on the industry. The sector’s lowering delinquency statistics in the third quarter of 2021 are likewise optimistic for future growth prospects.”
“The country’s industry’s resilience is demonstrated by the faster return in microfinance disbursements following the second wave of COVID impact. We believe this research will provide vital insights on developing trends in the Microfinance business,” said KM Nanaiah, Managing Director, Equifax Credit Information Services Pvt. Ltd.
Microfinance Pulse attempts to give information on trends in the Indian microfinance market, ranging from disbursements to delinquencies, as well as the fastest-growing states and loan categories. In addition to Hindi and English, the study is available in 12 other languages.
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