The gross loan portfolio of non-banking financial companies-microfinance institutions (NBFC-MFIs) rose 58% to Rs 59,514 crore in the July-September quarter of 2018-19 from Rs 37,635 crore in the corresponding quarter last year, a report by industry body Microfinance Institutions Network (MFIN) has stated.
The gross loan portfolio increased by 24.4% in the same quarter of the last financial year while it grew 53% in the April-June period of the current financial year.
Gross loan portfolio includes both net and managed loans. Net loans, which are made by MFIs, show on the balance sheet of microlenders. Managed loans do not show on the balance sheet of MFIs. Under this category of loans, banks issue credit which is distributed by microlenders. Also, loans that are sold off (securitised) by microlenders to other financial institutions are known as managed loans.
The managed portfolio of MFIs, which comprise 48 microlenders, stands at Rs 11,373 crore for the July-September period, up from Rs 5,365 crore in the year before. All 48 microlenders are members of MFIN.
Citing non-availability of the latest data for some microlenders, the report takes figures from the January-March 2018 quarter for Spandana Sphoorty and Muthoot Microfin, and numbers from the October-December 2017 quarter for SHARE Microfin.
“We have seen a healthy improvement in the quality of the portfolio since last one year which is a very encouraging sign for the industry,” said Harsh Shrivastava, chief executive of MFIN, in a statement.
The total loan portfolio of the microfinance industry for the July-September period stood at Rs 146,741 crore. NBFC-MFIs contributed 37% of the total industry portfolio with a share of Rs 54,018 crore in the second quarter of 2018-19.
The share of banks stood at 33%, while that of small finance banks was 17%. NBFCs and non-profit MFIs accounted for 12% and 1%, respectively.
The MFIs disbursed loans worth Rs 21,001 crore for the quarter. Of these, 80% of loan disbursements made by NBFC-MFIs were cashless.
“We continue to see robust investors’ confidence especially in the NBFC-MFIs segment which is due to sustained credit discipline in the sector,” Shrivastava added.
In terms of the regional spread, Karnataka had the highest share of the gross loan portfolio which was Rs 7,437 crore as on 30 September 2018. It also tops in terms of loan disbursement at Rs 2,528 crore in the quarter ended September.
For NBFC-MFIs, the total principal value outstanding of loans that have at least one payment more than 30 days overdue (PAR 30) has decreased to 2.4% for September 2018 from 7.5% in the previous year. This does not include the data of the country’s largest microfinance institution Bharat Financial Inclusion.
Spandana Sphoorty is looking to float its initial public offering. Kedaara Capital, VC firm Helion Venture Partners and strategic investor Valiant Mauritius Partners FDI Ltd are looking to partially exit Spandana in the IPO.
Mumbai-listed Bharat Financial Inclusion is the largest microfinance institution in the country. As on 30 September 2018, its gross loan portfolio stood at Rs 15,481 crore up from Rs 13,832 crore in the previous quarter.
In one of the major deals in the sector, private lender IndusInd Bank had agreed to buy Bharat Financial Inclusion in an all-stock deal.
