Write-offs In India Rises To 9% As Of June 2023 From 4.8% In March 2022: Report

Amid the concerns of economic slowdown due to geopolitical crisis across the globe, write-offs in India have increased from 4.8 per cent as of March 2022 to 9.0 per cent as of Jun 2023, according to a report by CRIF High Mark.

Giving an overview of India's micro-lending industry, the CRIF MicroLend Vol XXIV – June 2023’ stated that the portfolio outstanding of the microfinance sector stood at Rs 355.3K crore as of June 2023 with 5.2 per cent quarter-on-quarter (QoQ) and 24.3 per cent year-on-year (YoY) growth.

The top 10 states by gross loan portfolio (GLP) contributed to 83.1 per cent of national GLP and Bihar continues to dominate as a top state by GLP as of June 2023.

The report also stated that the live customer base grew by 13.4 per cent QoQ and by 22.6 per cent YoY. Notably, rural markets grew by 4.3 per cent QoQ and 27.3 per cent YoY as of June 2023.

India's urban markets witnessed 6.8 per cent QoQ and 19.9 per cent YoY growth in the same period of time.

It also revealed that the average balance per account witnessed a quarterly degrowth of 4.7 per cent and grew YoY by 3.4 per cent and the average balance per borrower witnessed a quarterly degrowth of 7.3 per cent and grew YoY by 3.8 per cent as of June 2023.

Sanjeet Dawar, Managing Director (MD), CRIF High Mark, said, “This growth can largely be attributed to the large-scale adoption of digitisation by the sector as well as the positive regulatory amendments brought in by RBI that have bridged the gap between rural and urban markets."

He added that this sustained growth in the microfinance sector, combined with government impetus for financial inclusion, is expected to create greater opportunities for micro borrowers to access formal credit and become a significant contributor to economic growth.