The microfinance sector grew FY22 Q4 Q4% year-on-year, the report said

Credit and Finance for MSME: The country’s microfinance sector in the fourth quarter of the 2021-22 fiscal year showed signs of recovery after the epidemic, with portfolio growth among lenders growing by more than 13 percent and YoY growth of about 5 percent year-on-year, indicating a return to normal. RBI-accredited self-regulatory body (SRO) Microfinance Institutions (MFIs) said in a report. The number of members of the association is 215.

Non-Banking Financial Institutions (NBFCs) -MFIs increased their portfolio by 19 per cent to Rs 94,096 crore, while non-profit MFIs (NFPs) grew by 30 per cent to Rs 2,745 crore, a quarter compared to the previous year. Done.

4 FY21 Q4 All lenders except banks which lost Rs 35,773 crore in FY22 were also allocated funds for the 4th quarter of the year from Rs 46,911 crore in FY21 Q4. Distribution of NBFC-MFIs has increased from Rs 27,364 crore in Q4 FY22 to Rs 30,216 crore in Q4 FY22 whereas for SFBs, it has increased from Rs 11,926 crore in FY21 Q4 to Rs 13,316 crore in Q4 FY22. Distribution for NBFCs and NFPs also increased from Rs 4,899 crore and Rs 858 crore in Q4 FY22 to Rs 5,389 crore and Rs 970 crore in Q4 FY21 respectively.

“The sector is close to the pre-covid level of distribution. We expected the situation to return to normal by the third quarter. In this recovery scenario, the 5 percent portfolio growth is also significant because the first quarter was almost washed out due to Covid, “P Satish, executive director, Sa-Dhan, told Financial Express Online.

Compared to YoY, the average ticket size (ATS) has increased significantly. For small financial banks, ATS increased from Rs 37,071 to Rs 45,066 and for NBFCs, ATS increased from Rs 40,085 to Rs 45,016. For NBFC-MFI, ATS has increased from Rs 35,266 to Rs 38,647. ATS, on the other hand, declined from Rs 41,777 to Rs 39,534 for banks and from Rs 30,175 to Rs 26,574 for NFPs, the report said.

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Significantly, as of March 31, 2022, portfolio quality has improved for almost all lenders under the bucket. The portfolio at risk (PAR) for arrears over 30 days has risen from 8.77 per cent in Q4 to 5.27 per cent in 4 Q4. Percentage in Q3. Similarly, PAR 60+ increased from 5.64 percent to 3.55 percent and PAR 90+ increased from 3.48 percent to 2.43 percent. PAR 180+ also shows improvement from 9.60 percent to 9.40 percent.

“This is an indication that the livelihoods of the microfinance beneficiaries are slowly getting back on track as they resume their activities,” Satish added. Overall, collection efficiency also improved to 95-99 percent, but recovery was not uniform across the states and union territories, according to the report.