MFIN: Micro-finance industry sees 38 pct growth in gross loan portfolio in FY19

A new report launched by Microfinance Institutions Networks (MFIN) says the micro-finance industry saw a 38 per cent growth in its gross loan portfolio at Rs 1.87 lakh crore in the 2018-19 fiscal. Gross loan portfolio of the sector was Rs 1.35 lakh crore in FY2017-18.

Total number of micro-finance accounts stood at 9.33 crore as on March 31, 2019, registering a growth of 21.9 per cent over FY18, the report said. MFIN, an RBI recognised self-regulatory organisation and industry association, constitutes 53 NBFC-MFIs as members. The members collectively disbursed 3.25 crore loans worth Rs 82,928 crore in FY19. "In 2018-19, microfinance industry showed its resilience by growing steadily in spite of liquidity squeeze that all NBFCs faced in the third quarter and natural disasters like cyclones and drought," MFIN's chief executive officer Harsh Shrivastava said.

NBFC-MFIs hold the largest share of portfolio in micro-credit with total loan outstanding of Rs 68,868 crore, which is 36.8 per cent of total micro-credit universe. As on March 31, 2019, aggregated total loan portfolio of NBFC-MFIs stood at Rs 68,207 crore, showing a growth of 47 per cent year-on-year basis. Apart from the growth in loan size and loan accounts, the staff of NBFC-MFIs grew at 34 per cent, totaling to 1,04,973 people. In FY19, NBFC-MFIs received a total of Rs 35,759 crore in debt funding from banks and other financial institutions, representing a growth of 63 per cent compared to FY18.

Total equity in FY19 grew by 42 per cent at Rs 14,206 crore. In terms of regional distribution of portfolio, East and North East accounts for 38 per cent of the total NBFC MFI portfolio, South 24 per cent, North 14 per cent, West 15 per cent and Central contributes 9 per cent. As of March 31, 2019, the banks had a micro-finance portfolio of Rs 61,046 crore, depicting a growth of 36 per cent over last one year while small finance banks (SFBs) showed a growth of around 25 per cent. The report said the asset liability management (ALM) of all sizes of NBFC-MFIs are well placed in terms of ALM across various buckets.

The borrowings of MFIs are of longer term while assets are of shorter-term and as a result, they have a comfortable gap as on March 31, 2019 to manage their obligations for the upcoming quarter and up to the next 12 months, it said.

(With inputs from agencies.)