The gross loan portfolio of the microfinance industry stood at Rs46,842 crore at the end of the March quarter, up 18% from the previous financial year, an industry report said.
According to the annual report released by Sa-Dhan, a self regulatory organization for the microfinance industry, the share of rural clientele in micro loans rose sharply from 38% last year to 61% since large microfinance institutions (MFIs) which were more urban-centric have now become small finance banks. Existing MFIs which are largely medium and small in size will continue to remain rural-centric.
These figures don’t take into account six companies which have turned into small finance banks.
“We expect growth in the range of 30-35% for the industry in the coming financial year,” said P. Satish, executive director of Sa-Dhan.
Borrowers having Aadhaar stood at 52% at the end of March 2017 compared to 18% last year for the same period. According to Satish, companies are stressing more on Aadhaar electronic know your customer (KYC) verification before disbursement of loans. Proportions of income to non-income generation loans stood at 85:15 at the end of March quarter, much higher than 50% stipulated by the central bank norms for income generating activities.
Non-performing assets (NPA) for the microfinance industry stood at 0.69% at the end of March quarter, slightly up from 0.15% reported last financial year. Since the central bank had given dispensation to the companies for 90 days on provisioning front for loans that turn bad, real effect of demonetisation would be seen on the financials of these companies post first quarter, said Satish.