With the loan outstanding reaching to Rs 2.32 lakh crore before the pandemic induced lockdown, India’s Microfinance Sector had flooded around 30% in the fiscal FY20. The gross loan portfolio of NBFC-MFI remained at Rs 74,371 crore, mirroring a rise of 31% as per the Microfinance Institutions Network (MFIN). The network between NBFC-MFIs constitutes of 14,275 branches.
With a total loan outstanding of Rs 92,281 crore, Banks acquire about 40% of the total portfolio which is the largest share of micro-credit. The second biggest suppliers are NBFC-MFIs with a 32% share. With a sum of Rs 40,556 crore aggregate portfolio, microfinance banks have a 17.5% share with the balance remaining with other NBFCs and small MFIs.
As per the analysis by asset-liability management (ALM), NBFC-MFIs are well placed in terms of ALM across various buckets, MFIN said in a note. “It is evident from the ALM analysis that borrowings of MFIs are of longer-term while assets are of shorter-term. As a result, they have a comfortable gap as on March 31 to manage their obligations for the April–June quarter,” it said.
In India, nearly 56 NBFC-MFIs are members of the MFIN with over 200 microlenders which include small and non-profit seeking MFIs. The smaller ones are confronted more strongly than the bigger ones as they face a cash flow mismatch and have no easy access to bank loans.