Jul 20, 2016

Rise in loan ticket size and shift of borrower base in favour of urban areas marked a strong rebound in Indian microfinance industry, whose combined gross loan portfolio (GLP) grew 84 per cent to Rs 53,200 crore in FY16 from Rs 28,900 crore in the previous year.

This and other emerging trends of the micro finance sector, which has been on a growth path for he past years after taking a bit hit in the aftermath of the curbs imposed in 2010 by the government of the undivided Andhra Pradesh, have been captured in a report titled 'Evolving landscape of microfinance institutions in India'.

The sector reported a significant surge of 84 per cent in GLP in FY16, since MFIsindulged in issuing large loans to clients after the RBI relaxed indebted exposure to single borrower from Rs 50,000 to Rs 100,000 in April 2015, according to the report.

MFIs have reported a 58 per cent jump in average loan size per customer from Rs 10,364 in FY14 to Rs 16,394 in FY16, since during the same period gross loan portfolio has increased three-fold while there was a two-fold increase in client base.

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Source: Business Standard

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