Mumbai: Microfinance industry’s gross loan portfolio grew by 47.85% year on year at the end of September 2019 driven by banks, NBFC MFIs and small finance banks. The total loan portfolio stood at ₹2.01 lakh crore as on 30 September compared to ₹1.36 lakh crore during the same quarter a year ago.
In the second quarter NBFC-MFIs portfolio grew by 17% year on year, banks by 104%, small finance banks by 42%, non-banking finance companies by 31% and other microfinance institutions de-grew by 5%. The total number of microfinance loan accounts saw an increase of 31.76% year on year to 9.79 crore at the end of 30 September quarter.
Asset quality however continued to deteriorate on a sequential basis with portfolio at risk (PAR) (when a loan instalment is not paid for more than 30 days) rising across institutions barring NBFC-MFIs. For NBFCs, PAR>30 days increased to 2.20% at the end of September compared to 1.97% in the previous quarter and 0.5% a year ago. While the portfolio quality of banks continues to be healthy, PAR>30 days however rose to 0.72% from 0.59% in the previous quarter and 0.60% a year ago. Small finance banks too saw a marginal increase in PAR>30 days to 0.82% compared to 0.79% in the previous quarter. NBFCs-MFIs showed an improvement in portfolio quality compared to the previous quarter, with PAR>30 days falling to 1.09% compared to 1.12% in the previous quarter. It was however higher compared to 0.92% a year ago.
Banks hold the largest share of portfolio in micro-credit with total loan outstanding of ₹80,570 crore, which is 40% of the total micro-credit universe. Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) are the second largest provider of micro-credit with a loan amount outstanding of ₹62,960 crore, accounting for 31% to total industry portfolio. Small Finance Banks (SFBs) have a total loan amount outstanding of ₹34,829 crore with total share of 17%, NBFCs 11% with total loan outstanding of ₹21,381 and other MFIs account for 1.0% share in the microfinance universe