Microfinance sector post 21% growth in FY23


CHENNAI: Microfinance sector recorded a 21% growth in FY23 at Rs 3,51,521 crore when compared with the previous year at Rs 2,89,845 crore.
A quarterly report by Sa-Dhan, an association of impact finance institutions, which includes MFIs, for the last quarter of FY23, shows there has been across the board growth among all types of microfinance players during the year. Except for the banks (other than SFB), all other type of institutions recorded double digit growth, with NBFC recording 49% growth and NBFC MFIs 37%. Not-for-profits and SFBs (Small Finance Banks) have posted significant growth of 25% and 19% respectively. Banks recorded only a paltry 3% growth in portfolio during the year, it adds.
Total disbursement of all lenders was at Rs 3,19,948 crore during FY23 against Rs 2,53,966 crore in the financial year 2021-22. Disbursement posted a growth of 26% compared to FY22, the report adds. Among the lenders, NBFC-MFIs have disbursed a maximum of Rs 1,24,063 crore, closely followed by banks at Rs 1,16,402 crore during FY 22-23. Also, for Y-o-Y growth, NBFCs have registered highest growth in disbursement (59%), followed by NBFC-MFIs (48%), SFBs (18%), NFPs (18%) and banks (7%) respectively.
The number of loan accounts for the microfinance industry increased to 1,363 lakhs in FY 22-23 from 1,239 lakhs in FY 21-22, posting a Y-o-Y growth of 10%, while lender-wise figures show NBFCs have registered highest Y-o-Y growth (23%), followed by NBFC-MFIs (15%), NFPs (6%), banks (6%) and SFBs (5%) respectively.
According to Jiji Mammen, ED & CEO of Sa-Dhan, the microfinance sector has shown significant performance during the last financial year. “The overall growth suggests that the industry has come out of the Covid blues completely and is on a growth path. The new regulatory norms have created a level-playing field and it is reflected in the growth of portfolio of NBFC and NBFC MFIs.”

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