Microfinance, a powerful instrument for financial inclusion, has witnessed an extraordinary surge in India. According to recent data, the microfinance loan portfolio recorded an impressive 22% growth, reaching a substantial Rs 3.48 lakh crore during the fiscal year 2022-23. This surge showcases the resilience and impact of microfinance institutions (MFIs) in catering to the financial needs of millions across the nation.
The gross loan portfolio, a key indicator of the sector's health, stood at Rs 2.85 lakh crore as of March 31, 2022, and witnessed remarkable expansion over the next fiscal year. The surge in microfinance loan disbursals is equally noteworthy, with a 23% increase to Rs 2,96,423 crores, compared to Rs 2,39,433 crore in the previous financial year. This uptick indicates a growing demand for microfinance services and a positive trend in financial inclusion.
One striking aspect is the increased ticket size of new loans, as reflected in the disbursement of about 7.17 crore loans during FY 2022-23, compared to 6.30 crore in the previous year. Microfinance institutions network (MFIN), the microfinance industry association, and an RBI-recognized self-regulatory organization have played a crucial role in facilitating this growth, ensuring responsible lending practices.
The growth in microfinance isn't just numerical; it extends to the depth of impact on individual lives. The active loan accounts have surged by 14.6% in the past 12 months, totaling 13 crore as of March 31, 2023. This suggests that not only are more people gaining access to microfinance, but the existing borrowers are also benefitting from continued financial support.
Regionally, the East & Northeast and South regions stand out, accounting for a substantial 63% of the total gross loan portfolio. Bihar emerges as the largest state in terms of portfolio outstanding, closely followed by Tamil Nadu and Uttar Pradesh. This regional distribution highlights the diverse geographical impact of microfinance, reaching even the remotest corners of the country.
A noteworthy revelation from the data is the significant role played by Non-Banking Financial Companies specializing in Microfinance (NBFC-MFIs). Eighty-two such entities emerge as the largest providers of micro-credit, with a staggering loan amount outstanding of Rs 1,38,310 crore. This accounts for 39.7% of the total industry portfolio, emphasizing the pivotal role NBFC-MFIs play in driving the success of the microfinance sector.
In conclusion, the surge in the microfinance loan portfolio is not just a numerical milestone; it signifies a positive transformation in the financial landscape of India. The growth is a result of collaborative efforts between microfinance institutions, regulatory bodies, and NBFC-MFIs. As the sector continues to expand, it becomes a beacon of hope for those seeking financial inclusion, turning aspirations into realities for millions across the nation.