Non-banking finance companies-microfinance institutions (NBFC-MFI) and small finance banks have gained market share in microfinance lending sector at the expense of banks as they outperformed the lenders in terms of growth in gross loan portfolio (GLP) on a year-on-year basis in the fourth quarter of the financial year ended March 31.
Although banks continue to dominate the microfinance portfolio with over 37% market share, the NBFC-MFIs and SFBs posted double digit on year growth in GLP in Q4FY22 compared to a muted on year growth witnessed by banks, credit information bureau CRIF said in its quarterly Microlend report. On a sequential basis however, banks posted 8.1% growth in microfinance loan portfolio, marginally lower than NBFC-MFI growth of 8.2% but higher than 7.1% growth posted by SFBs.
Overall, the gross loan portfolio of the microfinance sector grew by 10.2% in Q4FY22 to Rs 2.86 trillion. Despite increase in GLP, loan originations declined by 13.9% on year to Rs 77,400 crore in Q4FY22 and loans disbursed also fell by 17.2% on year to 1.91 crore loans.
The number of accounts that were overdue for more than 180 days increased on a year-on-year basis, as per data compiled by CRIF shows. In Q4FY22, accounts that were overdue for more than 180 days (PAR 180+) jumped to 8.4% of the gross loan portfolio from 4.4% in the same quarter last year. The agency compiled the data for top 30 MFI institutions with a market share of 88% as of Q4FY22. However, there was an improvement in the accounts that were overdue for more than 30 days and 90 days.
The top 5 best performing lenders have loan overdue of more than 30 days of 1.5% of their cumulative GLP, 0.8% of loan overdue for more than 90 days and 7.4% of loans overdue for more than 180 days.
In terms of ticket size, the loans in the range of Rs 30,000-50,000, which comprised the highest share of the GLP, improved 42% on year while loans with ticket size of Rs 50,000-75,000 grew by 14.4% on year. The two ticket sizes consist of more than 60% of the total GLP in the sector.
In geographical mix, top 10 states include Tamil Nadu, Bihar, West Bengal, Karnataka, Maharashtra, Uttar Pradesh, Rajasthan, Odisha, Madhya Pradesh and Kerala, which constitute 83.4% of the GLP as of March 31. Of the total portfolio held by banks, 44.3% is concentrated in eastern region. NBFC MFIs have 27.5% share each in east and south and SFBs have concentration of 36.7% in south out of the total GLP.