Microfinance loans grow 24% YoY in Q1 of FY23; credit quality stable

Fund flow to the sector has improved but some smaller MFIs still find it difficult to access finance from banks

The loan portfolio of micro-finance institutions (MFI) increased 24 per cent year-on-year (YoY) to Rs 2.75 trillion by end of this June from Rs 2.22 trillion a year ago.

Sequentially, the loan book expanded from Rs 2.62 trillion at end of March 2022 (Q4Fy22), according to Sa-Dhan, the self-regulatory organisation (SRO) for microfinance.

Jiji Mammen, chief executive officer of Sa-Dhan, said the sector is on track after overcoming the impact of the coronavirus. Although it was busy in implementing the Reserve Bank of India’s regulations during Q1, it has clocked a healthy growth.

Fund flow to the sector has