The gross mortgage portfolio (GLP) of banks within the microfinance sector grew 15.5% year-on-year to Rs 1.06 lakh crore on the finish of the earlier fiscal whereas that of small finance banks (SFBs) de-grew 6.6% y-o-y to Rs 41,708 crore, in line with a report revealed by credit score bureau CRIF Excessive Mark.
The fifteenth version of CRIF MicroLend, launched on Thursday, confirmed that banks continued to dominate the microfinance market with a portfolio share of 42% on the finish of FY21, up from 39.4% in FY20. Considerably, SFB’s market share within the final fiscal declined to 16.4% from 19.1%.
In the course of the third quarter of FY21, the market share of banks and SFBs stood at 41.7% and 16.9%, respectively, within the microfinance area. Between Q4FY20 and Q3FY21, NBFC-MFIs’ market share stood virtually the identical at round 30%, whereas it grew to 30.6% on the finish of Q4FY21.
Apparently, earlier this month, P N Vasudevan, managing director and CEO of Equitas Small Finance Financial institution, mentioned its acutely aware plan to develop the unsecured micro finance e book at a “slower tempo’ in comparison with the remainder helped mitigate the general credit score value affect. “As of March 31, 2021, the unsecured microfinance advances had been 18% whereas the remaining 81% had been secured loans. The least impacted product, small enterprise loans secured by home property, constitutes 45% of the whole advances,” Vasudevan mentioned.
“Microfinance trade demonstrated sturdy resilience and recovered in Q2 after muted enterprise in Q1FY20-21. Mortgage disbursements in Q3 and This autumn of FY21 had been much like earlier yr’s respective quarters,” mentioned Vipul Jain, head of merchandise, CRIF Excessive Mark, whereas releasing the report.
The portfolio excellent of microfinance sector stood at Rs 2.54 lakh crore as of March 2021, with 10% quarter-on-quarter progress and eight.4% year-on-year progress.
“Delinquency was increased in Q3 and This autumn of FY20-21 in comparison with pre-Covid ranges. We hope to see these numbers transfer again to their historic ranges in coming quarters,” Jain mentioned.
The report mentioned early delinquency (1- 30 days) lowered by 3.6% in March 2021 in comparison with December 2020 from 8.7% to five.1%. Microfinance loans with reimbursement delays of over 30 days (30+% delinquency) remained excessive for West Bengal, Assam and Maharashtra.