Micro Loans Surge 27% Year-On-Year In March 2024: Crif High Mark Report
Karnataka leads the states where borrowers have the maximum active loans.
The micro loans portfolio of various lenders increased by 27% year-on-year in the March 2024 quarter, according to a report by credit information company Crif High Mark on Tuesday. Although stress levels, indicated by loan defaults had remained stable or improved in recent quarters, they slightly increased during this period.
Amid regulatory concerns about unsecured loans, data shows that personal loan outstanding for microfinance borrowers grew the second fastest among retail assets, with a growth of over 38%. The report also indicated that the gross loan portfolio increased by 27% to Rs 4.42 lakh crore in March 2024 quarter. This represents an 8.5% growth as compared with the previous December quarter.
According to the report, the Gross Loan Portfolio is dominated by the top 10 states, which collectively make up 83.5% of the total. The states of West Bengal, Bihar, and Uttar Pradesh experienced the most rapid growth in the January-March timeframe.
However, the proportion of loan assets overdue for the duration between 31 days and 180 days grew to 2.1% in March from the 2% level in December 2023, the report said.
Tirunelveli district was the worst performer nationally on asset quality, followed by Coimbatore and Madurai, making Tamil Nadu home to the three top districts where microlenders are facing maximum stress.
Tamil Nadu also topped nationally on the average balance per account front, with an outstanding of Rs 62,200 per borrower.
The report said borrowers with a higher number of active loans have higher delinquency and added that over 12% of the borrowers have four or more active loans. Karnataka leads the states where borrowers have the maximum active loans.
It said 14.2% of the MFI borrowers have an active retail loan, which is marginally lower than the 14.9% in the year-ago period.
However, personal loans in the concerning unsecured lending segment have witnessed the second fastest growth at 38%, the data said, adding that property loans grew the fastest at over 41%.
Gold loans continued to be the favourite retail lending product preferred by the MFI borrowers, with a portfolio outstanding of Rs 35,679 crore with 41.2 lakh active loans.
Among the lenders, the Non-Banking Finance Company-MFI segment has the highest market share at 39.2%, followed by banks at 33.2% and Small Finance Banks at 16.9%, the report said.
(With PTI inputs)
