Microfinance grows significantly: Report
Kolkata, Feb 19 : While microfinance institutions in Andhra Pradesh continue to be at a standstill, the industry has witnessed decent growth in the rest of the country, a report said Tuesday.
During the third quarter of this fiscal, banks exhibited confidence in MFIs, a report released by Microfinance Institutions Network (MFIN) said.
The report is based on data collected from 41 members of the MFIN, a self-regulatory group of MFIs. The members constitute about 85 percent of the microfinance sector in India.
The report said outstanding Gross Loan Portfolio (GLP) for the industry during the period under review has shown a significant upward movement.
"About 75 percent of MFIN members showed an increase in GLP this quarter over GLP in the same period last fiscal and also second quarter of this financial year. The industry has grown in states such as West Bengal, Tamil Nadu, Kerala, Bihar and Uttar Pradesh," a release said here.
"For the first time since the Andha Pradesh crisis in October 2010, there has been a growth in GLP and disbursements for AP-based MFIs," it further said.
Alok Prasad, CEO of MFIN, said the data signals a positive outlook for MFIs .
"The pan-India trends reveal that microfinance institutions continue to grow in states other than Andhra Pradesh. With banks continuing to exhibit confidence in NBFC-MFIs, I feel certain of MFIs' ability to reach a wider cross-section of the unbanked/under-banked segment," Prasad added.
The country's microfinance sector took a major setback in the microfinance crisis in Andhra Pradesh in 2010, involving high rates of default and subsequent reduction in lending.