Non-Andhra Pradesh microfinance institutions exhibiting signs of recovery: Microfinance Insitutions Network

HYDERABAD: Two years after the Andhra Pradesh microfinance crisis brought the microfinance sector to its knees, microfinance institutions (MFIs), especially those based outside Andhra Pradesh are showing signs of recovery, a report put out by Microfinance Insitutions Network (MFIN), a self-regulatory body of 46 RBI registered NBFC-MFIs, has claimed. This, MFIN said, was despite the pan-India MFI borrower base shrinking 17% to around 22.77 million borrowers in 2011-12 from over 27.5 million borrowers in 2010-11, total loan disbursements falling 38% to around Rs 20,000 crore during 2011-12 from over Rs 32,629 crore in 2010-11 and gross loan portfolio nationally falling 15% to Rs 15400 crore from Rs 18157 crore. MFIs outside AP are continuing to show steady growth both in terms of gross loan portfolio, which has increased by 22%, and disbursements that went up 5% during 2011-12, said MFIN MicroMeter, the first edition of MFIN’s quarterly report, adding that write-offs by non-AP MFIs also came down by 45% during the period. The report also claimed that repayments made by clients outside AP were steady at around 99% despite operational issues being faced by all MFIs, demonstrating resilience of the MFI sector and credit worthiness of its clients.Commenting on the report, MFIN CEO Alok Prasad said that the data signaled a positive outlook for NBFC-MFIs. “While the pan-India indicators present a fairly negative picture of the state of the industry, a closer look at the data reveals trends that are promising. Investor confidence has grown with asset sales transactions doubling to Rs 3000 crore in the last fiscal even as 99% client repayment rates outside AP is the strongest sign of inherent strength of the industry. The future can only get better,” Prasad said.