40% of Microfinance sector loans are from Banks

New Delhi, November 27, 2019: According to the quarterly review of the microfinance sector by Sa-Dhan, 40% of the industry?s market share is captured by banks. As per the report, the Banks? market share has gone up from 34% witnessed in the last quarter. At present, NBFC-MFIs have 32% market share with loan exposure of ₹63,401 crores. Small Finance Banks, NBFCs and Not-For-Profit MFIs have market share of 17%, 10% and 1% respectively.

According to P. Satish, Executive Director ? Sa-Dhan, ?The Microfinance sector is witnessing a robust growth. While this growth is certainly a welcome trend, we are also closely monitoring the sector to see if there is unabashed lending taking place. The sector will be able to sustain the growth only if all external factors are weighed in.?

The review points out that the average ticket size of loans for banks have reduced from ₹39,082 in June? 2019 to ₹36,754 in Sept 2019. Dadra & Nagar Haveli is leading with a ticket size of ₹47,168, followed by Sikkim at ₹46,719. The average ticket size of the sector is ₹32,163. Overall write off ratio is 1.23%. In terms of write-off ratio, the Top 5 states are Uttarakhand (4.61%), Maharashtra (3.78%), Madhya Pradesh (2.74%), Delhi (2.45%), and Uttar Pradesh (2.44%).

Commenting on Portfolio At Risk (PAR), P. Satish said, ?There are 15 States/UTs with PAR 30+ value higher than the industry average of 1.05% and 10 States/UTs with PAR 90+ value higher than the industry average of 0.43%. This shows that PAR has continued to fall from a post- demonetization high of 5.5%+ in 2017.?

Microfinance operation in India spread across 626 districts, an increase of 11 districts over previous quarter spread over 37 states and union territories.


About Sa-Dhan

Sa-Dhan is the oldest and largest association of community development finance institutions in India. It has been working for two decades in supporting and strengthening the agenda of Financial Inclusion in India and creates a space and understanding of microfinance with policy makers, bankers, government, researchers and practitioners. It has a membership base of 205 institutions which reaches out to approximately 37 million clients across the country, with loan outstanding of more than ₹80,000 crores from over 90% districts in India. Sa-Dhan is recognized by the RBI as a Self-Regulatory-Organization (SRO) for the Microfinance Sector; and as a National Support Organization (NSO) by National Rural Livelihood Promotion (NRLM).

Company :-Sa-Dhan Communications

User :- Rituparna Roy

Email :-rituparna@sa-dhan.org