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Microfinance trade sees 31% rise in mortgage portfolio at Rs 2.36 lakh crore in FY20: Report

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New Delhi: India’s microfinance trade registered a 31 per cent bounce in its mortgage portfolio to Rs 2.36 lakh crore for 2019-20 and expects to submit a average progress of about 15 per cent within the present monetary yr, an trade report mentioned on Monday.

Despite the onset of the coronavirus pandemic within the final quarter of the monetary yr 2019-20, the nation’s microfinance trade grew 31 per cent, trade consultant Sa-Dhan mentioned.

According to Sa-Dhan’s ‘Bharat Microfinance Report 2020’, the trade’s mortgage portfolio excellent as on March 31, 2020, had stood at Rs 2,36,427 crore.

The year-on-year progress of mortgage excellent in 2019-20 was 31 per cent, which is considerably decrease than the expansion of 41 per cent in 2018-19.

The decline in progress charge is attributed to pure disasters that wreaked havoc in Odisha, Kerala and West Bengal, unfold of misinformation and false rumours by vested curiosity political teams in sure districts of Assam and Karnataka, it mentioned.

Of the full portfolio, 32 per cent is from NBFC-MFIs, whereas banks and small finance banks (SFBs) collectively contributed to 59 per cent of the portfolio.

The year-on-year progress of the portfolio is 38 per cent for NBFC-MFIs, 24 per cent for banks and 34 per cent for SFBs.

NBFC-MFIs have grown mortgage accounts by 26 per cent and common ticket measurement by 9 per cent, Sa-Dhan mentioned.

The information has been collated from 252 lenders, together with microfinance establishments, not-for-profit microfinance establishments, non-banking monetary corporations (NBFCs), SFBs and banks.

“While the year started on a positive note, the looming large of the pandemic in the last quarter of fiscal 2019-20 threw a dampener on our projected growth,” mentioned Sa-Dhan Executive Director P Satish.

He added that regardless of unprecedented challenges, the trade is predicted to develop however extra modestly this yr at round 15 per cent, on condition that the primary two quarters noticed a lot decreased exercise (repayments and contemporary disbursements) as a result of lockdown and ensuing moratorium.

Mid- and small-scale MFIs have additionally been severely affected with a liquidity squeeze and excessive value of funds, he mentioned.

Releasing the report, NABARD Chairman G R Chintala mentioned, “Despite all odds, the microfinance sector works with resilience to bring the financially underserved in the ambit of financial inclusion. To create sustainable business models by micropreneurs, there is a need to increase financial outlays.”

Chintala added that NABARD has zeroed in on numerous key interventions, together with creation of livelihood enhancement funding, establishing of joint legal responsibility teams, augmenting social enterprise, and easing of mortgage woes of small MFIs to allow monetary inclusion for the underserved by 2025.

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