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ICICI Securities Report
We met Dr. Alok Misra, Chief Executive Officer and Director of MicroFinance Institutions Network, to understand the underlying business trends and key developments in non-banking financial company-micro finance sector. Takeaways:
Amid news of mounting regulatory concern over NBFC sector, NBFC-MFIs are better placed given microfinance industry is already operating on cashless disbursements post demonetisation and FY24 year-to-date growth remained around 13%.
While weighted average lending rate for top-17 players has increased by 200 basis points to 23.7% since spread cap removal, the increase was largely due to increase in cost of funds as well as on account of losses incurred during Covid.
Some players being outlier might have attracted regulator attention but most MFI players are operating as per MFIN's code of conduct with board approved pricing policy.
Total Punjab portfolio stands at Rs 59 billion with exposure to highly impacted districts at around Rs 8 billion; collections have either improved or stabilised since December 2023 levels.
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