MFIN loan disbursals rose 52 per cent in third quarter

MUMBAI: Loan disbursals by MFNs rose 52 per cent in the third quarter of this last fiscal, taking the total outstanding to Rs 18,425 crore, driven by robust growth in client additions in Tamil Nadu and West Bengal.

According to a report by the Mincrofinance Institutions Network (MFIN), the aggregate gross loan portfolio of the industry jumped 29 per cent to Rs 23,998 crore as of the December quarter.

Over 85 per cent of micro finance institutions (MFIs) showed an increase in their loan disbursals during the period, with the medium sized MFIs (with Rs 100-500 croe loans) registering highest growth of 62 per cent.

West Bengal, Tamil Nadu, Karnataka and Maharashtra were accounted for 62 per cent of the portfolio, with the once-largest market Andhra Pradesh showing no fresh lending. For the first time, the number of clients in Tamil Nadu and West Bengal surpassed the number of clients in Andhra Pradesh.

On the insurance and pension services provided by MFIs, the report, said as of the end of Q3, MFIs facilitated life insurance to over 25 million clients with total value of sum insured at Rs 38,400 crore. MFIs opened over 1 million pension accounts, 27 percent of them in government sponsored Swavalamban scheme.

Commenting on the encouraging industry performance, MFIN Chief Executive Alok Prasad said: "The robust pick-up in growth demonstrates the customer connectedness and robustness of their business model." The data also reflect the growing confidence of investors in the industry as during third quarter the total funding raised by MFIs rose to Rs 3,448 crore with Rs 2,820 crore coming in from banks and the rest from other soruces.

The MFIN is the premier industry association for the micro finance industry with 43 members, constituting over 85 per cent of the industry.