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Some Facts About India’s Microfinance Sector

31 October, 2010

India’s fast-growing microfinance sector has attracted regulatory scrutiny following allegations of aggressive collection practices and borrower suicides, with the finance minister calling for a code of conduct on interest rates and recovery norms.

The new developments promise to bring about an era of change to a sector that has seen surging growth. Here are some facts about the microfinance sector.

– The gross loan portfolio of India’s microfinance sector accounts for more than 7 percent of the sector’s worldwide loan portfolio size. As much as 30 percent of the world’s microfinance borrowers are in India.

– While the average size of a microfinance loan is $522.8 globally, according to MIX Market data, the average loan size in India is only about a fourth of that at $144.

– India is the largest microfinance market in the world, with some 120 million homes with no access to financial services, estimates CRISIL Research. MFIs are mostly concentrated in India’s southern states, serving about 70 million people.

– The microfinance market has grown at an average annual rate of nearly 80 percent over the last three years, Sa-Dhan said.

– There are more than 3,000 MFIs and NGO-MFIs, of which about 400 have active lending programmes, according to CRISIL Research. The top 10 MFIs account for nearly three-fourths of loans outstanding.

(Sources: CRISIL Research, Mix Market)

 


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Some Facts About India’s Microfinance Sector

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