MFI sector posts 21% growth in loan kitty
Report released by industry body Sa-Dhan attributes the growth to a favourable economic environment and the revised regulatory framework issued by the RBI

India’s microfinance sector saw a 21% increase in loan portfolio to reach ₹3.52 trillion by the end of FY23, according to the Bharat Microfinance Report 2023.
The report released by industry body Sa-Dhan on the inaugural day of the National Conference on Inclusive Growth attributed the growth to a favourable economic environment and the revised regulatory framework issued by the RBI and quickly adopted by all MFIs. The report compiled data from 213 microfinance institutions (MFIs) representing more than 99% MFI activities in the country.
Lending in rural India rose, with the proportion of rural clientele reaching 74% in 2022-23. Further, women borrowers to microfinance has remained significant, comprising about 98% of the total clientele of MFIs.
Region-wise, the southern region continued to have the upper hand in the share of both outreach and loans outstanding, followed by the eastern region.
“We need an inclusive society where people’s aspirations could be improved. MFIs have been engaged in various credit plus activities such as health, education, water and sanitation and other development imparting financial and digital literacy, promoting climate resilient agriculture, water and sanitation products. It is an impressive inclusive story possible due to growth of microfinancing," said Shaji K. V., chairman, Nabard, after releasing the report.
Commenting on the findings of the Bharat Microfinance Report, Jiji Mammen, executive director and CEO of Sa-dhan said, “Post covid, the microfinance sector also recorded a sharp growth with all parameters showing an excellent result. The sector now looks set for another round of sustained growth owing to favourable economic environment and benefited from the revised regulatory framework issued by the RBI."
According to the report, the MFIs reached out to over 53.2 million clients with a total loan outstanding of ₹179,855 crore under micro credit.
MFIs’ portfolio alone grew by 33% with client growth of 19%. The MFIs also reported a growth in loan disbursements of 55% over the previous year.
In all, the NBFCs and NBFC-MFIs contributed 86% of client outreach and 83% of outstanding portfolio.
The number of saving linked SHGs has also increased during the year with 16.23 crore households. The number SHGs credit linked also increased during the year with a total of 6.95 million SHGs having a loan outstanding with banks, amounting to ₹1,88,079 crore.
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