Credit and financing for MSMEs: Despite the second wave of Covid, the microfinance industry (MFI) disbursed 25,808 crore rupees during the quarter from April to June 2021, a 300% increase over loans of Rs 6,460 crore disbursed during the period of the year following the first wave of Covid. However, disbursements in June 2021 were down 72% compared to Rs 94,001 crore loans disbursed in the quarter ending March 2021, according to a quarterly report titled Microfinance Pulse by SIDBI and Equifax India for the quarter ending in June. In terms of volume, while there was a 209% growth in the number of disbursed loans of 23 lakh in the April to June quarter of last year compared to 71 lakh loans in the June quarter this year, the growth rate has contracted by 70 percent. 2.38 crore cent loans in the January-March quarter of this year.
“Compared to 2019 levels, disbursement has not yet been fully scaled up, but compared to last year, the sector has already picked up the pace. While the April-June quarter of last year was impacted due to Covid, this year the June quarter saw significant improvement. However, compared to the September quarter of last year, the growth we see is around 80-90% for the September quarter of this year, ”P. Satish, executive director of the Indian MFI Sa-Dhan.
During the Covid period, the MFI sector had managed to hold its own with stable year-over-year growth in the current portfolio, dropping from Rs 224,204 crore in the June 2020 quarter to Rs 222 060 crore in June with an 11% drop from Rs 249,277 crore in the current portfolio in the March 2021 quarter. Banks and non-bank financial corporations (NBFCs) had contributed more than 75 percent to the outstanding of the wallet.
“There were no collections in April due to last year’s foreclosure, while in May some collections took place and as a result the portfolio amount was almost stagnant. This year, the disbursement was almost zero after the second wave, but the collection was still nominal as there had not been a full lockdown. So there is an ongoing portfolio decline, ”Vivek Tiwari, founder and CEO of Satya MicroCapital told Financial Express Online.
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Disbursement had fallen for NBFC-MFI Satya MicroCapital to a nominal amount of Rs 5-6 crore in June of last year due to Covid, from around Rs 75 crore disbursements in June 2019. However, “in June, we have again disbursed around Rs 75-80 crore. The sector is expected to grow by at least 25-30% this fiscal year compared to the previous fiscal year, ”Tiwari added.
On the other hand, arrears from 1 to 179 days for the MFI sector jumped to 31.44% in the June quarter of this year, against 13.59% in March 2021 and 3.19% in the June quarter of this year. Last year. The highest share was 1.29 days late by almost 15 percent, followed by 10 percent by 30-59 days late. In fact, with the exception of the 90 to 179 day default tranche, all delinquency tranches increased in June 2021 compared to March 2021.
“According to our data, for the September quarter also, there is a stable growth compared to September 30 of last year. Delinquency had improved since the June quarter while compared to last year it is slightly higher because the moratorium was there last year, however compared to the first quarter of this fiscal year, the risk levels of the portfolio in the second quarter have declined, ”added Satish.