MFI Portfolio De-grows 3.53% in Q3, Asset Quality Stressed

Mumbai, Feb 25 (PTI) Microfinance outstanding across all lenders de-grew by 3.53 per cent year-on-year to Rs 3.85 lakh crore, and the asset quality stress also intensified, a report said on Tuesday.

The asset quality stress inched up, with the loans unpaid for 91-180 days zooming to 3.3 per cent at December-end from 0.9 per cent a year earlier and 1.9 per cent in September 2024, the report by Microfinance Institutions Network said.

Alok Misra, the chief executive and director of the self-regulatory body, said, "The industry is going through a period of curtailed funding and stricter credit underwriting based on MFIN guardrails, which has led to lower disbursements, leading to a fall in GLP (gross loan portfolio)".

The slippages are expected to have peaked, and the situation on liquidity and credit quality will improve in the March quarter, he added.

The average loan size has increased to Rs 53,350 from Rs 50,487 in the quarter-ago period and Rs 47,374 in the year-ago period.

All the segments have shown de-growth, except the non-bank finance companies segment, which showed a 22 per cent increase year-on-year.