Structural Interventions

Microfinance Pulse

Small Industries Development Bank of India (SIDBI) and Equifax, collaborated to launch a first-of its-kind newsletter “Microfinance Pulse” to track the trends in the microfinance sector viz. disbursements delinquencies, state-wise distribution, top loan categories etc.

This data will act as a lighthouse helping the microfinance industry and policymakers navigate through crests and troughs of lending cycle, so as to ultimately facilitate responsible lending.

Key highlights of the 6th edition:

The 6th Microfinance Pulse highlights sourcing & portfolio trends, changing geographical dynamics along with institutional trends of the Industry. While reaching out to 6 crore live borrower base as on March 2020, MFI Industry has registered a growth of 27% as on March 2020 over March 2019.

The Microfinance Industry witnessed a 27% Y-o-Y growth quarter ending March 2020. In terms of portfolio outstanding, Banks have registered 51% growth from March 2019 to March 2020 followed by SFBs with 35% growth. As on March 2020 portfolio outstanding of MFI industry is `228,074 crore, contribution by Banks is the highest in portfolio outstanding at 40% followed by NBFC-MFIs at 33%. The Microfinance industry witnessed 13% reduction in number of loans disbursed and 9% reduction in disbursement by value from JFM’19 to JFM’20. NBFC-MFIs share in disbursement by value peaked to 33% in JFM’20 quarter - highest across 5 quarters. Industry ATS witnessed 4% growth from JFM’19 to JFM’20. The overall industry delinquency in March 2020 at 5.49%, highest, across five quarters. 30-59 days past due is showing an improvement, it has reduced to 0.49% in March 2020 from 0.70% in December 2019.

Top 10 states contribute more than 80% to Pan India MFI Portfolio. States of Bihar & Uttar Pradesh register highest YoY growth. Pan India 90+ Delinquency peaked to 0.87% with some southern and western states experiencing more than 0.70% delinquency levels. Aspirational Districts contribute 12% to Pan India Outstanding balance and 90+ delinquencies are at 0.43%.

Uttar Pradesh is 6th top state Pan India in terms of POS with a 7% Pan India share. ATS of Uttar Pradesh is `33,323 as on March 2020. In Uttar Pradesh, NBFCs source the highest ATS at `55,349 followed by Banks at `35,342. As on March 2020 90+ delinquency of Uttar Pradesh is 0.36%.

There is an inverse relation between the number of loans sourced and Loan Cycle IDs and delinquencies. Higher the Loan Cycle ID, lower the number of loans sourced and delinquency. Loan Cycle ID -1 dominates with 42% disbursed amount share.