On the back of the private equity and venture capital money raised by microlenders, the gross loan portfolio of non-banking financial company-microfinance institutions (NBFC-MFIs) rose to Rs 42,701 crore in the October-December from Rs 29,800 crore in the corresponding quarter last year, according to a report by industry body MicroFinance Institutions Network.
“It is interesting to note that in the past few months, equity investments in the microfinance sector have increased with many NBFC-MFIs raising significant investments from domestic and foreign investors. After a small jolt post demonetisation, the pace of growth in the industry has again picked up,” said Rakesh Dubey, president of MicroFinance Institutions Network (MFIN).
The gross loan portfolio includes both net loan portfolio and managed loan portfolio.
During the quarter, NBFC-MFIs received a total of Rs 6,945 crore in debt funding from banks and financial institutions.
The total loan portfolio of the microfinance industry stood at Rs 123,343 crore and NBFC-MFIs contributed 33% of the total industry portfolio with a share of Rs 39, 916 crore in the third quarter of the current financial year.
The share of banks stood at 37% while small finance banks had 21% of the share. NBFCs and non-profit microfinance institutions accounted for 8% and 1%, respectively.
During the October-December quarter, NBFC-MFIs disbursed around 67 lakh loans which is a 61% increase from the corresponding period last year.
The loan amount disbursed by NBFC-MFIs during the quarter stood at Rs 15,035 crore compared with Rs 7,583 crore in the corresponding period last year. Karnataka, Odisha, Bihar, Maharashtra and Uttar Pradesh accounted for 53% of the total disbursements.
The industry also saw impressive deal activity during the quarter.
In December 2017, microfinance institution Spandana Sphoorty Financial Ltd has raised Rs 125 crore ($19.5 million) from existing investors private equity firm Kedaara Capital and Canadian pension fund Ontario Teachers’ Pension Plan.
In the same month, IndusInd Bank had closed the acquisition of microlender Bharat Financial Inclusion in an all-stock deal.
The small finance bank category includes eight MFIs that have turned into small finance banks.
The report analysed data from 48 NBFCs that have MFI licences from the Reserve Bank of India.