CRIF High Mark Report: Microfinance Sector Sees 30.9% YoY Growth

CRIF High Mark, a leading credit bureau recently published their CRIF MicroLend Vol XXIV December 2023 report. The report highlights that the microfinance sector witnessed a Y-o-Y growth of d 30.9% as of December 2023. Live customer base grew by 24.2% Y-o-Y. Rural markets grew 30.8% Y-o-Y and urban markets witnessed 31.2% Y-o-Y growth as of December 2023.

The key observations from the report:

·         NBFC MFIs dominate the market with portfolio share of 38.3%, followed by Banks 33.4%, SFBs 17.4%, NBFCs 9.4% as of Dec’23

·         Top 10 states by GLP contribute to 83% of national GLP, Bihar continues to dominate as top state by GLP as of Dec’23

·         ₹89K crore originations (by value) and 186.8 lakh originations (by volume) in Q3 FY24

Average Balances and Lender Exposure:

·         Average balance per account witnessed quarterly growth of 1.9% and Y-o-Y growth of 6.1% as of Dec’23

·         Average balance per borrower witnessed quarterly growth of 1.5% and flat Y-o-Y growth of 4.3% as of Dec’23

Geographic Deep Dive:

·         Top 10 states constitute 83% of the GLP as of Dec’23

·         West Bengal and Uttar Pradesh recorded highest Q-o-Q growth of 10.2% and 9.6% respectively as of Dec’23

·         Average balance per borrower for top states Bihar, Tamil Nadu and Uttar Pradesh stood at ₹57.7K, ₹60.5K,₹49K respectively as of Dec’23

·         Microfinance sector dominated by Eastern and Southern region (31% each), as of Dec’23

·         NBFC MFIs have 30% share in East, NBFCs have 55.5% in South and SFBs have concentration of 34.6% in South

Portfolio - Lender Type Mix:

·         Y-o-Y growth of 47.4% for NBFCs, 32.8% for SFBs, 30.2% for NBFC MFIs and 27.1% for Banks

·         52% of NBFC MFIs’ portfolio comprised of loans of ticket sizes ₹30K-₹50K, as against 49.8% for SFBs, 43.7% for NBFCs and 43.7% for Bank

Portfolio – Ticket Size Mix:

·         Portfolio of ticket size ₹50K-₹75K witnessed Y-o-Y growth of 45% as of Dec’23

·         Portfolio of ticket size <=₹30K witnessed Y-o-Y decline of 15.2% as of Dec’23

·         Share of portfolio of lower ticket sized loans <₹30K decreased from 13.8% in Sep’23 to 12.2% in Dec’23

·         As of Dec’23, loans of ticket size ₹30K-₹50K have the maximum share by value and volume at 47.7% each

·         Share of loans of ticket size ₹30K-₹50K has increased from 46% as of Dec’22 to 47.7% as of Dec’23

Microfinance – Risk Profile:

·         PAR 30+ DPD improved from 3.8% as of Dec'22 to 2.0% as of Dec’23

·         PAR 90+ DPD improved from 2.0% as of Dec'22 to 0.9% as of Dec’23

·         PAR 180+ DPD improved from 10.2% as of Dec’22 to 9.1% as of Dec’23. West Bengal, Maharashtra and Orissa have highest PAR 180+ DPD

·         Write-offs increased from 6.8% as of Dec'22 to 8.6% as of Dec’23