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