Mumbai: The Microfinance industry may be observing some healthy trends.
A recent report by rating agency CRIF reveals healthy trends in delinquency and disbursals.
Disbursements for the quarter ending March 2021 recovered to the levels of March 2020 after showing drops during the first three quarters of FY21. The report further states that overall disbursements grew around 1% yoy while disbursements of loans of ticket size of over 40,000 grew by 23%
Overall portfolio outstanding of Microfinance sector stood at Rs.25.38 lakh crores as of Mar' 21 -- a growth of 10% from the previous quarter and 8.4% from a year ago in March 2020.
30+ PAR (portfolio at risk) improved from 14.5% in Dec'20 to 9.7% in Mar'21 but 90+ PAR deteriorated from 3.8%% in Dec'20 to 4.4% in Mar'21.
The 180+ PAR category, delinquency reportedly increased from 0.7% in Jun'20 to 3.4% in Dec'20 and 4.4% in Mar'21. The report says that Assam contributed most of the flows into 180+ DPD.""
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.
The report also states the following:
• Nearly a quarter or 21.5% borrowers are exposed to 4 or more lenders -- highest for Tamil Nadu and least for Assam
• Portfolio at risk has come down in some categories - 30+ PAR (portfolio at risk) at 9.7% and 90 PAR at 4.4% in Mar' 21 compared to 14.5% and 3.8% in Dec' 20
• 1 - 30 days delinquency reduced to 3.6% in Mar' 21 compared to Dec' 20 from 8.7% to 5.1%
• 30+% delinquency remains high for West Bengal, Assam and Maharashtra
• Rapidly increasing 180+ portfolio of Assam from 1.3% in Mar' 20 to 6.5% & 13.6% respectively in Dec' 20 and Mar' 21 due to stress build up as a result of socio - political factors affecting the region in Q 3 FY 20, and the recent Microfinance Bill 2020 impacting largely NBFC MFIs
• Increasing forward flow rates in 31-90 & 91-180 buckets in Feb' 21 and Mar' 21.