Microfinance companies gross loan portfolios on the rise

CHENNAI: Gross loan portfolios of microfinance institutions have shown an upward movement with 75% of MFIN (microfinance institutions network) members reporting an increase in the gross loan portfolios. "For the first time since the Andhra Pradesh crisis in October 2010, there has been a growth in gross loan portfolios and disbursements for Andhra Pradesh based MFIs (micro finance institutions).While micro finance activity in Andhra Pradesh continues to be at a standstill, the industry has grown in states such as West Bengal, Tamil Nadu, Kerala, Bihar and Uttar Pradesh. Industry productivity ratios continued to improve in 2012-13," Alok Prasad, chief executive officer, MFIN said.
MFIN has 41 members that constitute about 85% of the micro finance sector in India (excluding SHGs). "Pan India trends reveal that microfinance institutions continue to grow in states other than Andhra Pradesh. With banks continuing to exhibit confidence in NBFC (non banking finance companies) and MFIs, we feel certain of MFIs' ability to reach a wider cross-section of the unbanked and under-banked segment," Prasad added.
The Indian micro-finance sector has a borrower base of 23 million and total loan disbursements to this sector exceed Rs 61 billion.