In FY23, the microfinance sector added up to 80 lakh female clients.
According to the India Microfinance Review FY23 report, the microfinance industry (MFI) in the nation welcomed 80 lakh new women clients in 2022–2023, bringing the total number of low-income women clients to 6.64 crore throughout 729 districts through 12.96 crore active loans as of March 2023.
When comparing FY23 to FY22, the microfinance business observed an increase in portfolio outstanding and an improvement in portfolio quality; this is a favorable development that bodes well for the industry.
As of March 31, 2023, the aggregate portfolio of the microfinance sector, comprising all regulated firms (Banks, SFBs, NBFCs, and NBFCMFIs) operating under the MFI model, stood at Rs. 3,48,339crore.
With the exception of the Covid period, the portfolio has consistently increased over the past five years. It further stated that the sector’s outstanding portfolio increased by 22% in the previous fiscal year, a sign of prudent growth and latent demand for microloans.
All things considered, the industry has expanded more than 20 times, from Rs. 17,264 crore in March 2012 to Rs. 3.48 lakh crore in March 2023.
211 organizations were operating in the microfinance sector as of March 31, 2023. NBFCMFIs accounted for 82 organizations, making them the biggest microcredit provider.
NBFCMFIs, with a dominant 39.7% position in the industry’s portfolio, are essential to the growth of microfinance. The noteworthy loan amount of Rs. 1,38,310 crore that is still outstanding “demonstrates their strong commitment to financial inclusion and empowerment,” stated Vikas Singh, CEO and co-founder of the Delhi-based NBFC Sugmya Finance Pvt Ltd.
Regionally speaking, the portfolio distribution shows that the shares of the East and North-East are steadily falling, while the shares of the North, West, Central, and Southern regions have all increased.
Despite the ascent of Bihar as the leading state in terms of portfolio outstanding as of December 31, 2022, and Jharkhand’s excellent growth, the overall share of East and NorthEast fell from 37.7% as of March 31, 2022, to 34.9% as of March 31, 2023. The degrowth of the portfolios in West Bengal and Assam offset the growth in these two states. The continued conflict may cause Manipur to shrink even more in the upcoming months.
Before the Andhra Pradesh crisis, the South was the center of microfinance; now, it is quickly catching up to the East and North East. With prospects in Telangana and AP opening up, South is projected to grow much more.
In FY23, the average ticket size for microfinance loans disbursed was Rs. 41,391, up 6.3% year over year from Rs. 38,929 in FY22.