Microfinance Strikes Deep Roots in West Bengal
Tuesday, February 17, 2015
The Indian microfinance sector has found a new Andhra Pradesh in West Bengal. The sector, which has not been able to see any business in the state of Telangana and AP, has seen brisk business in this eastern state, piping other southern states as well.
“In the third quarter we witnessed a sustained revival of the microfinance industry — which augurs well for the national financial inclusion agenda. Given the current trend lines, the industry will grow by over 40 per cent in GLP terms, this fiscal. With PM Jan Dhan Yojana driving the opening of basic bank accounts and NBFC-MFIs driving the growth in micro-credit, poor households are finally being able to access financial services in a much more comprehensive way,” said Alok Prasad, chief executive officer, MFIN.
The self regulatory body has released the third quarter report which says that the aggregate gross loan portfolio (GLP) of MFIs stood at Rs 31,450 crore, a growth of 51 per cent over Q3 FY 13-14. The managed portfolio is Rs 2,350 crore, standing at 7 per cent of the aggregated GLP. However, ten largest MFIs in terms of GLP account for 77 per cent of the total industry.
West Bengal contributes 16 per cent to the total gross loan portfolio, Tamil Nadu at 14 and Karnataka at 11 per cent. The top five states that contribute a chunk of the gross loan portfolio are West Bengal, Tamil Nadu, Karnataka, Maharashtra and Uttar Pradesh account for 59 per cent.
A major microfinance player from West Bengal, Bandhan has seen a rise of 53 per cent in its business till the December ended quarter this fiscal, compared to last fiscal at Rs 78.10 billion. It now is the largest MFI with the next largest player SKS, followed by Janalakshmi and Ujjivan.
However, the gross loan portfolio of MFIs is now more evenly distributed across various regions in the country. Share of south region in the GLP is 29 per cent, east 29, north 21 and west 21. Average loan outstanding per client on a Pan India basis is Rs 10,962.