State of Business: Growth in Microlending in Maharashtra below National Average

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Sep 2018
India, September, 08 2018 - According to the MFIN data, Maharashtra saw its gross loan portfolio grow 40 per cent from a year ago at the end of June.

Growth in microlending in Maharashtra lags behind the national average, according to the data released by the Microfinance Institutions Network (MFIN), a club of microlenders. The data pertains to only MFIN numbers, who account for around one-third of the total microfinance in the country.

According to the MFIN data, Maharashtra saw its gross loan portfolio grow 40 per cent from a year ago at the end of June. MFIN members had outstanding loans of Rs 4,743 crore at the end of June compared to Rs 3,379 crore a year earlier. The aggregated gross loan portfolio of MFIN members, which are non-banking financial company-microfinance institutions (NBFC-MFIs), stood at Rs 51,878 crore, up 53 per cent from a year ago and a rise of 8 per cent from the end of March.

Among the top 10 states in terms of gross loan portfolio, Rajasthan saw its loans more than double to Rs 1,769 crore at the end of June. It was followed by West Bengal with a 70 per cent rise in loans to Rs 3,937 crore. In terms of market share, Karnataka had the highest loans outstanding at Rs 6,259 crore, followed by Odisha at Rs 5,849 crore and Bihar at Rs 5,457 crore.

One reason why growth has lagged in Maharashtra is perhaps owing to the risk of non-performing assets. About 8.4 per cent of loans in the state are overdue by at least 30 days. About 7 per cent are overdue by at least 180 days, MFIN data shows. This is the highest among the top 15 states in terms of gross loan portfolio. Uttar Pradesh follows Maharashtra with 6.3 per cent of loans having at least one repayment overdue by at least 30 days. For Haryana, this metric was 6.1 per cent, and for Madhya Pradesh, 5.22 per cent.

However, the good news is that this ratio is coming down. The per cent of loans where at least one installment was overdue by at least 30 days was as high as 28 per cent for Maharashtra at the end of March 2017. For the industry too, this was 11.1 per cent then, and reduced to 3.2 per cent at the end of June.



 

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