MUMBAI: Banks’ share within the excellent loans to microfinance firms has dropped to 31% in Sept 2023 from 40% in Sept 2021. Banks have misplaced market share to non-banking finance firms and small finance banks through the interval, with each these classes of lenders rising their share.
NBFCs (microfinance firms) had misplaced market share in loans through the onset of the pandemic due to a credit score crunch confronted by finance firms. RBI had additionally shifted to activity-based regulation, harmonising numerous the principles for banks and finance firms.
However, within the final two years, MFIs have bounced again, rising sooner than the business. Over two years, their mortgage guide has grown 86%, whereas banks have grown solely 19%, and small finance banks have grown 77%.
According to CRIF Microlend, a report on the business by the credit score bureau, banks had excellent loans of Rs 1.2 lakh crore to the MFI section. As towards this, MFIs had a mortgage guide of practically Rs 1.5 lakh crore, with small finance banks having Rs 72,873 crore as of Sept 2023.
Two years earlier, on the finish of Sept 2021, the MFI portfolio of banks stood at slightly over Rs 1 lakh crore, MFIs at Rs 79,595 crore and small finance banks at Rs 41,158 crore.
MFI’s are targeted on small ticket loans to these on the backside of the pyramid. Banks are additionally energetic within the house as these loans qualify for precedence sector. Most small finance banks had been initially MFIs that obtained a financial institution licence.
According to the report, the gross mortgage portfolio has elevated 26% as of Sept 2023 to Rs 3.8 lakh crore from Rs 3 lakh crore two years in the past.
NBFCs (microfinance firms) had misplaced market share in loans through the onset of the pandemic due to a credit score crunch confronted by finance firms. RBI had additionally shifted to activity-based regulation, harmonising numerous the principles for banks and finance firms.
However, within the final two years, MFIs have bounced again, rising sooner than the business. Over two years, their mortgage guide has grown 86%, whereas banks have grown solely 19%, and small finance banks have grown 77%.
According to CRIF Microlend, a report on the business by the credit score bureau, banks had excellent loans of Rs 1.2 lakh crore to the MFI section. As towards this, MFIs had a mortgage guide of practically Rs 1.5 lakh crore, with small finance banks having Rs 72,873 crore as of Sept 2023.
Two years earlier, on the finish of Sept 2021, the MFI portfolio of banks stood at slightly over Rs 1 lakh crore, MFIs at Rs 79,595 crore and small finance banks at Rs 41,158 crore.
MFI’s are targeted on small ticket loans to these on the backside of the pyramid. Banks are additionally energetic within the house as these loans qualify for precedence sector. Most small finance banks had been initially MFIs that obtained a financial institution licence.
According to the report, the gross mortgage portfolio has elevated 26% as of Sept 2023 to Rs 3.8 lakh crore from Rs 3 lakh crore two years in the past.
