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The-Bharat-Microfinance-Report-2016.pdf
Highlights of the Bharat Microfinance Report
Growth and Outreach
MFI’s currently operates in 28 States, 5 Union Territories and 568 districts in India. The reported 156 MFI’s with a branch network of 12,221 have reached out to an all-time high of 37 million clients with an outstanding loan portfolio of Rs 48,882 Crore. This includes a managed portfolio of Rs 9854 Crore. The average loan outstanding per borrower stood at Rs 13,162 and 80% of loans were used for income generation purposes. Outreach grew by 13% and loan outstanding grew by 33% over the previous year. The Southern region continues to have the highest share of both outreach and loans outstanding, followed by East. However, growth rates are higher in the Northeastern and Central regions. The outreach proportion of urban clientele is increasing year on year as against the rural population. The proportion of urban clientele which was 44% in 2013-14 increased to 67% in 2014-15. Women borrowers constitute 97% of the total clientele of MFI’s, SC/ST borrowers constitute 28% and minorities 18%. Of the total, NBFC-MFI’s contribute to 85% of client outreach and 88% of an outstanding portfolio, while NGO MFI’s contribute to the remaining. MFI’s with a portfolio size of more than Rs 500 Crore contribute significantly to the total outreach (82%) and loan outstanding (85%) of the sector.
Operational and Financial Aspects
MFI sector employs more than 94,500 personnel, out of which 16% are women and 64% are field staff. Active borrowers Per Credit Officer (ABCO) is 419, which is lower than the previous year indicating a higher focus on client services and new recruitments. Financial expense is the major expense (50%) incurred by MFI’s. Personnel expense and other administrative expenses contribute 23% and 25% respectively. Median OER (Operating Expense Ratio) and FCR (Finance Cost Ratio) remained at 11.45% and 12.42% respectively. It is seen that the OER comes down with the scale of operation. MFI’s with a portfolio of more than Rs 500 Crore have a median OER of 8% and FCR of 12.9%. The yield of the sector for the year was 23.8% which is the highest for the NBFC-MFI’s (24.2%) and lowest for the Co-Operatives (20.2%). The Margin for different types of institutions was in the range of 9-14%. NBFC-MFI’s maintained a median margin of 10.09%. Median OS (Operational Self Sufficiency) is 113%. Approximately 13% of MFI’s have OSS less than 100%. This includes 7% of the NBFC-MFI’s on account of AP and 17% not-for-profit MFIs. Generally, the OSS improves with the average loan size and yield of the institution. Median ROA and ROE for the sector remained at 1.94% and 9.25% respectively. The returns are generally higher for not for profit MFI’s and very large-sized MFI’s. The CAR (Capital Adequacy Ratio) for all types of MFI’s remained above the desirable level of 15%. NBFC MFI’s have CAR of 21.5%. Leveraging of the sector was 2.9. The sector received a sum of Rs 40,802 Crore, which includes a portfolio sale of Rs 5,221 Crore. Total outstanding borrowing of MFI’s stood at Rs 35,573 crore, with a substantial share of this derived by NBFC-MFI’s (96%) especially from the very large MFI’s (84%).
Self Help Groups and the BC Model
The number of SHG’s linked to credit and bank loan amounts to SHG’s has witnessed an increasing trend after 2010-11. However the growth rate of the number of savings linked SHG’s has experienced a declining trend; to date, 101 million families have been covered under the SBLP program with a total number of 77.12 lakh SHG’s with a saving amount of Rs 11,307 Crores. A total of 44 lakh SHG’s have a gross loan outstanding of Rs 51,721 Crores. The amount of savings and the average per SHG savings (Rs 14,662) held in the banking system are both increasing since 2011-12. The average loan disbursed per SHG for 2014-15 is reported at Rs 184,551, whereas the average loan outstanding per SHG stood at Rs 115,295. The aggregate NPA of SHG loans remains a concern; it has increased marginally by 0.6% from 6.8% in 2013-14 to 7.4% in 2014-15. The quality of SHG’s and their performance have emerged as the major issues affecting the movement. Also, the fact that NRLM will push for improvement in the SHG Bank linkage with better monitoring, lower rates of interest and a sharper focus on livelihood generation, would give a greater fillip to the growth of the SHG programme. MFI’s are finding the BC model increasingly attractive to carry out their activities on the credit side and to spread it to deposit-taking activities. 42 MFI’s had exposure to a BC loan portfolio of Rs 3841.53 Crores through linkage to 18 banks. Apart from this 42 MFI’s were undertaking deposit related activities for 16 banks. The deposit portfolio of BC’s amounted to Rs 1383.61 Crores. You can purchase the complete 2015 Bharat Microfinance Report soon and we will update the link as soon as it becomes available. To compare this data against last year’s data you can download the 2014 Bharat Microfinance report here.
