Indian Microfinance industry's loan book grows 10% to Rs 2.85 trn in FY22

NBFCs increase market share while that of banks dips

The gross loan portfolio (GLP) of the microfinance sector in India rose by 10 per cent to Rs 2.85 trillion as on March 31, 2022 from Rs 2.59 trillion a year ago. Sequentially, the GLP rose by a litte more than 11 per cent, from Rs 2.56 trillion on December 31, 2021, according to data by Microfinance Institutions Network (MFIN).

Alok Misra, Chief Executive & Director, MFIN said, the microfinance industry has shown good progress during Q4FY22, building on the momentum created in the third quarter ended December 2021.

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While the number of unique borrowers served by the industry declined to 58 million in March 2022 from 59.3 million a year ago, the loans accounts rose from 108.3 million in March 2021 to 113.1 million in March 2022.

The harmonised regulations for microfinance, near normalisation of collection efficiency and Supreme Court’s verdict clearly stating that NBFC regulation is the sole purview of the RBI, are hugely positive trends. These will support good growth in 2022-23, Misra said. MFIN today released its quarterly publication Micrometer.

The loan portfolio of non-banking finance companies working as MFIs (NBFC-MFIs) expanded by 19.4 per cent to Rs 96,561 crore at the end of March 2022 from Rs 80,906 crore as on March 31, 2021.

During FY22, the proportion of NBFC-MFI loans in the universe of portfolio increased from around 31.1 per cent as on March 2021 to 35.2 per cent as on March 31, 2022. However, banks continue to be the main contributors with a share of 40 per cent in March 2022, down from about 43.67 per cent a year ago.