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Bihar surpasses Tamil Nadu to top average borrower loans in the country

Jul 5, 2023, 14:05 IST
Business Insider India
  • The top 10 states contribute a substantial 85.2% to the gross loan portfolio (GLP).
  • Average balance per borrower for Bihar, Tamil Nadu, and Uttar Pradesh were ₹27,200, ₹26,600, and ₹26,300 respectively.
  • The microfinance sector is predominantly dominated by the Eastern region, accounting for 32.7% of the market.
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As of March 2023, the microfinance sector has a total outstanding portfolio of ₹337.6 thousand crore, which reflects a 6.6% quarter-on-quarter (Q-o-Q) growth and a 17.9% year-on-year (Y-o-Y) growth. Non-banking financial companies (NBFCs) remain the dominant players in the market, holding a portfolio share of 37.3%, followed by banks at 33.1%, and small finance banks (SFBs) at 16.6%, according to the MicroLend, the quarterly publication on microfinance lending by credit Bureau CRIF Highmark.

There has been an improvement in the PAR 30+ DPD (Portfolio at Risk with 30 or more days past due) from 3.8% in December 2022 to 2.2% in March 2023, the report adds.

How the states performed

The top 10 states contribute a substantial 85.2% to the gross loan portfolio (GLP), with Bihar surpassing Tamil Nadu to become the leading state in terms of GLP. Uttar Pradesh, and Bihar have recorded the highest growth rates of 15.9%, 14.6%, and 13.5% respectively.

When considering the average balance per borrower, Bihar, Tamil Nadu, and Uttar Pradesh have figures of ₹27,200, ₹26,600, and ₹26,300 respectively. The microfinance sector is predominantly dominated by the Eastern region, accounting for 32.7% of the market, closely followed by the Southern region at 27.0%. In terms of market concentration, NBFC microfinance institutions hold a significant share of 48.0% in the Central region, while SFBs have a concentration of 22.3% in the South.
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Portfolio ticket size growth

The portfolio consisting of ticket sizes ranging from ₹50,000 to ₹75,000 has experienced a Y-oY growth of 40.3%, and a Q-o-Q growth of 12.2% as of March 2023. On the other hand, the portfolio with ticket sizes less than or equal to ₹15,000 has witnessed a Y-o-Y degrowth of 28.2% and a Q-o-Q degrowth of 16.2% during the same period.

As of March 2023, loans falling in the ticket size range of ₹30,000 to ₹50,000 have the highest share in terms of both value and volume on a Y-oY basis, accounting for 47.5% and 45.4% respectively.



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