NBFC-MFIs loan disbursement drops 96 pc to Rs 570 cr in Jun quarter

Loan disbursements by non-banking financial companies-microfinance institutions (NBFC-MFIs) declined 96 per cent to Rs 570 crore in the first quarter of the current financial year, according to a report by Microfinance Institutions Network (MFIN).

It had stood at Rs 15,865 crore in the corresponding quarter of the previous year.

The data pertains to NBFC-MFI members of MFIN, a self-regulatory organisation and industry association of the microfinance sector in the country. It has 56 NBFC-MFIs and 35 associates including banks, small finance banks (SFBs) and NBFCs as its members.

Analysis on NBFC-MFIs is based on data collected from 54 members that are registered with the Reserve Bank of India (RBI), MFIN said.

In the reporting period, NBFC-MFIs disbursed 2.04 lakh loans as compared with 59 lakh in the first quarter of the previous financial year, the report showed.

Average loan amount disbursed per account during the June 2020 quarter was Rs 27,996, an increase of around 4 per cent against the year-ago period.

"The April-June 2020 quarter has been unprecedented both for microfinance lending institutions and microfinance borrowers. With the lockdown impacting livelihood of clients, MFIs provided moratorium to clients as per RBI guidelines," MFIN Chief Executive Officer Alok Misra said.

However, the moratorium was not extended to MFIs by all lenders, which caused double squeeze, he added.

In terms of NBFC-MFIs, the aggregate gross loan portfolio (GLP) of MFIs stood at Rs 72,170 crore as on June 30, 2020, which represents a year-on-year growth of 25 per cent as compared to June 30, 2019, and a contraction of 3 per cent in comparison to March 31, 2020.

The GLP includes an owned portfolio of Rs 55,296 crore and a managed portfolio of Rs 16,874 crore.

The microfinance industry's total loan portfolio stood at Rs 2,27,727 crore as of June 30, 2020, for loans originating after February 2017, it said.

During the reporting quarter, NBFC-MFIs received a total of Rs 5,973 crore in debt funding, which is almost equal to the corresponding period a year ago and 52 per cent lower than the fourth quarter of 2019-20 at Rs 12,448 crore.

As on June 30, 2020, NBFC-MFIs, on an aggregated basis, have a network of 14,167 branches with 1,09,239 employees, the report said.

Based on the June 2020 quarter data available for 52 NBFC-MFI members, loan amount disbursed through cashless mode is 93 per cent.

About 52 per cent of members have reported that more than 90 per cent of their disbursement took place in cashless mode, while 42 per cent members have reported zero disbursements during the quarter.