Stress Levels Inch Up As Micro Loans See 27% Growth: Study
The gross loan portfolio grew 27% to Rs 4.42 lakh crore in March, the report said.
The micro loans portfolio of various lenders grew by 27% year-on-year for the March 2024 quarter, a report said on Tuesday. After remaining stable or improving over the last many quarters, the stress levels in terms of loan default inched up marginally during the quarter, the report by credit information company Crif High Mark said.
At a time when the regulator is flagging concerns on unsecured loans, the data pointed out that personal loan outstandings of microfinance borrowers witnessed the second fastest growth among other retail assets with a portfolio growth of over 38%.
The gross loan portfolio grew 27% to Rs 4.42 lakh crore in March, the report said, adding that the growth was 8.5% as compared to the preceding December quarter figure.
The top 10 states account for 83.5% of the Gross Loan Portfolio (GLP), it said, adding that West Bengal, Bihar and Uttar Pradesh posted the fastest growth during the January-March period.
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 balances 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.
