CRIF, BFSI News, ET BFSI



The disruption caused by the second wave has impacted the microfinance industry severely as the industry was coming to pre-covid levels slowly.

A report by CRIF High Mark which evaluates the microfinance sector on quarterly basis states that the Portfolio outstanding of the Microfinance sector is at Rs.253.8 K crore as of March 2021 with 10% Q-o-Q growth 8.4% Y-o-Y growth.

Around 21.5 borrowers have exposure to 4 or more lenders with highest for Tamil Nadu and least for Assam. The 30+PAR (Portfolio at risk where dues have gone beyond 30 days) is at 9.7% and the 90 PAR at 4.4% in March 2021 as compared to 14.5% and 3.8% as of December 2020.

The short-term period delinquency of 1-30 reduced by 3.6% in March 2021 as compared to December 2020 from 8.7% to 5.1%. The report also states that 30+% delinquency remains high for West Bengal, Assam and Maharashtra.
Certain socio-political factors building up in states like Assam are resulting in a rapidly increasing 180+ portfolio from 1.3% in March 2020 to 6.5% and 13.6% respectively in December 2020 and March 2021. This impacted the Q3FY20 and the recent Microfinance Bill 2020 impacting NBFC-MFIs.

The report also states that the increasing forward flow rates in 31-90 and 91-180 buckets in February 2021 and March 2021.

Disbursements recovered in Q4FY21 to near pre-covid levels of Q4FY20 after shrinking in the first nine months of FY21. Whereas overall disbursements have grown by around 1% on an annual basis while disbursements of loans of ticket size more than Rs 40,000 have grown by 23%.

Vipul Jain, Head of Products, CRIF High Mark said, “Microfinance industry demonstrated strong resilience and recovered in Q2 after muted business in Q1 FY 20-21. Loan disbursements in Q3 and Q4 FY 20 – 21 were similar to previous year’s respective quarters. Delinquency was higher in Q3 and Q4 of FY 20 – 21 compared to pre Covid levels, we hope to see these numbers move back to their historic levels in the coming quarters.”





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