Indian Microfinance industry's Loan Book grows 10% to Rs 2.85 trn in FY22

Current Context: The gross loan portfolio (GLP) of the microfinance sector in India Increased by 10% to Rs 2.85 trillion as of March 31, 2022, Compared to Rs 2.59 trillion a year ago.

Even though the number of unique borrowers served by the industry decreased to 58 million in March 2022 from 59.3 million a year ago, the loan accounts increased from 108.3 million in March 2021 to 113.1 million in March 2022.
It is also supported by and Supreme Court’s verdict which clearly stated that NBFC regulation is the only purview of the RBI, which is a hugely positive trend. These have supported good growth in 2022-23.
Due to this microfinance industry has shown good progress during Q4FY22, building on the momentum created in the third quarter ended December 2021.
In addition to that, the loan portfolio of non-banking finance companies working as MFIs (NBFC-MFIs) expanded by 19.4% to Rs 96,561 crore at the end of March 2022 Compared to Rs 80,906 crore as of March 31, 2021.
However, banks continue to be the main contributors with a share of 40% in March 2022, down from about 43.67% a year ago.