NBFC-MFIs (Non-Banking Financial Corporation-Microfinance Industry Network) are the largest provider of micro-credit amongst other regulated entities, a recent report by Microfinance Industry Network (MFIN), an umbrella body of microfinance institutions (MFIs) of the country revealed.
NBFC-MFIs provided finance with a loan outstanding of Rs 1,38,310 crore as on 31 March 2023, in the microfinance space.
The sum accounted is equivalent to 39.7 per cent of the total industry portfolio.
Banks stand at the second position with the share of the portfolio of micro-credit outstanding at Rs 1,19,133 crore, comprising 34.2 per cent of the total in the microfinance space.
Small finance banks (SFBs) comprised a total outstanding of Rs 57,828 crore with a total share of 16.6 per cent, the report said.
Till 31 March 2023, the total MFI portfolio stood at Rs 3,48,339 crore.
According to the MFIN report, the MFI sector has immense growth potential with the market size estimated to grow to around Rs 13 lakh crore during the current fiscal 2023-24.
MFIN said that the recent regulations have strengthened the governance in microfinance operations.
It also added that the sector has bounced back post-COVID in terms of funding, portfolio quality and client addition by the individual MFIs.
In the report, MFIN suggested that the sector needs to devise a strategy to ensure that while digital processes are continuing, client connection through center meetings is not diluted, which is important to maintain the collection efficiency ratio at higher levels.