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 7th edition:

The 7th edition of Microfinance Pulse highlights disbursement & portfolio trends, changing geographical dynamics along with institutional trends of the industry.

As on 30th September 2020 Microfinance Industry services close to 6 crore live borrower base. Microfinance Industry has witnessed Y-o-Y growth of 14% in terms of portfolio outstanding. Portfolio outstanding of Microfinance Industry as on 30th September 2020 is 2,27,844 crore. SFBs have witnessed highest Y-o-Y growth of 24% in terms of portfolio outstanding. Banks are contributing 41% towards portfolio outstanding followed by NBFC-MFIs at 31%.

Microfinance Industry is recovering slowly, 92 lakhs loans were disbursed in JAS’20 for 32,375 crore which is 300% higher compared to AMJ’20 in terms of volume and 393% in terms of value. More than 70% of loans are disbursed in 10k to 50k buckets. Banks contribution is highest across all the quarters in terms of loan disbursal, followed by NBFC-MFIs. Industry ATS witnessed 5% growth from JAS’19 to JAS’20. The overall delinquency in September 2020 is highest at 19.83% across all the quarters. Top 9 states contribute more than 75% to Pan India portfolio. Tamil Nadu & West Bengal contributes 15% each towards portfolio outstanding. 90+ delinquencies of Tamil Nadu & West Bengal are well maintained at 0.25% and 0.38% respectively. Aspirational Districts contribute 12% to Pan India Outstanding balance and 90+ delinquencies are at 0.35%.

Bihar is 3rd top state Pan India in terms of POS with a 11% Pan India share. ATS of Bihar is `38,209 as on September 2020, which is 8% higher than Pan India ATS. In Bihar, Banks source the highest ATS at 42,743 followed by SFBs at `41,457. As on September 2020 90+ delinquency of Bihar is 0.18%.

The COVID-19 pandemic has disrupted operations in every sector across the globe. Needless to say, Microfinance institutions too have experienced slowdown. Contribution of top 5 states in loan sourcing by volume and value was 56% in JAS’19, which has come down to 52% in JAS’ 20 due to the pandemic. In JAS’19 top 5 states disbursed 103 lakhs loans. In JAS’20 top 5 states disbursed 49 lakh loans which is 53% lower than JAS’19. Disbursement amount has come down by 50% from JAS’19 to JAS’20.