Microfinance industry, one of the crucial sectors hit hard by the demonetisation of high value currency notes in 2016, has bounced back with a 47 per cent growth in financial year 2017-18.
The 'Bharat Microfinance Report 2018' brought out by industry body Sa-Dhan says the sector clocked a growth of 47 per cent, with gross loan portfolio of Rs 68,789 crore in FY18 compared to FY16-17's industry size of Rs 46,842 crore.
"While the overall environment is conducive for the growth of the microfinance sector, the post-demonetisation effects persist in certain geographies where the institutions are still grappling with repayment related issues. The carry over effect has been noticed in the financials of some MFIs which had a bigger exposure in these geographies", says P. Satish, Executive Director, Sa-Dhan.
Growth trend is also visible in the client outreach segment. Growth in client outreach segment was 19 per cent over the past year.
In 2017-18, MFIs witnessed a 56 per cent increase in loan disbursements over the previous year. It stood at Rs 81,737 crore, the highest since 2015-16. However, the top ten MFIs disbursed Rs 55,013 crore which is 67 per cent of sector's total and rest of other MFIs disbursed 33 per cent. Among the regions, South still dominates the overall loan disbursement of MFIs with 34 per cent, followed by East with 30 per cent. Central and West have a share of 18 per cent and 9 per cent, respectively. While North and North-east have least disbursement share of 7 per cent and 2 per cent, respectively.
BMR 2018 also indicates that while the share of rural clientele continues to be higher at 55 per cent of the total, it has declined from 61 per cent in 2016-17. In the quantum of loan amount outstanding, rural India is still much higher. Out of Rs 68,789 crore, rural areas have a share of around Rs 39,800 crore or 58 per cent.
MFIs have also increased their workforce in the last one year. As on March 31, 2018, total workforce stood at 1,10,914 - a growth of 24 per cent.
Sa-Dhan has a membership base of 187 institutions, which reaches out to approximately 35 million clients across the country, with loan outstanding of more than Rs 69,789 crore from over 90 per cent districts in India.