Micro-Credit Disbursements Drop 35.8% in Q3: MFIN Report

As per the report given by the Microfinance Institution Network (MFIN), an association that covers all microfinance institutions (MFIs), the disbursement of microfinance loans has decreased by 35.8% which amounts to Rs 22,091 crore during the third quarter ending December 2024. This is a comparison with respect to the same duration last year.

The average balance assets under management (AUM) for MFIs during June, 2024 quarter ended stood at Rs 1,42,695 crores which is 0.1% lower when compared to June 2023 quarter ended.

The average loan disbursed per account during the third quarter stands at Rs 51,691 crores which is an increase of 15.2% as compared to the previous fiscal quarter.

As per the report, the portfolio at risk (PAR), defined as unpaid loans aging over 30 days, increased significantly to 8.8% as on December 31, 2024 against 3.5% reported a year ago for the prior period ending December 31, 2023.

In the current third quarter, NBFC-MFIs received loans against shares from banks and other different institutions that provided total debt funding of Rs 12,921 crore. Total equity of MFIs rose from the preceding quarter ended September 2024 by 9.3% and reached Rs 35,451 crore.

Alok Misra, MFIN’s CEO and director, stated, “Due to increased strictness in the credit underwriting process, the industry is currently experiencing a phase of reduced funding. The sector’s gross loan portfolio (GLP) as of December 31, 2024 was at Rs 3,85,348 crore.”