HomeFinance NewsBihar overtakes Tamil Nadu to become India's largest MFI market
As of March 2023, Bihar's microfinance (MFI) borrowings amounted to Rs 48,900 crore, accounting for 14.5 percent of the overall portfolio. Meanwhile, Tamil Nadu's MFI borrowings stood at Rs 46,300 crore, representing 13.7 percent of the total outstanding. This significant shift in rankings reflects Bihar's rising prominence in the microfinance sector.
By CNBCTV18.comJuly 6, 2023, 12:00:29 AM IST (Published)
Bihar has overtaken Tamil Nadu to become the state with the highest microlending borrowings in India as of March 2023, according to a report released on Wednesday, June 5. The report, published by credit information company Crif High Mark, highlighted Bihar's impressive growth with a 13.5 percent increase in the gross lending portfolio during the March quarter compared to the previous quarter.
As of March 2023, Bihar's microfinance (MFI) borrowings amounted to Rs 48,900 crore, accounting for 14.5 percent of the overall portfolio. Meanwhile, Tamil Nadu's MFI borrowings stood at Rs 46,300 crore, representing 13.7 percent of the total outstanding. This significant shift in rankings reflects Bihar's rising prominence in the microfinance sector.
The overall MFI portfolio outstanding witnessed substantial growth, reaching Rs 3.37 lakh crore by the end of March, reflecting a 17.9 percent increase. The report also highlighted an improvement in asset quality. The proportion of MFI loans overdue for over 90 days decreased to 1.1 percent in March 2023, compared to 2 percent in December 2022.
Among the top ten states, which collectively account for 85 percent of the outstanding portfolio, Bihar's rise to the top was accompanied by Uttar Pradesh, Karnataka, West Bengal, Maharashtra, Madhya Pradesh, Odisha, Rajasthan, and Kerala. These states have experienced significant growth in microfinance borrowings, contributing to the overall strength of the sector.
The report further revealed that the average exposure per borrower in Bihar was Rs 27,200, slightly higher than Tamil Nadu's Rs 26,600. Additionally, the eastern region of India dominated the MFI landscape, representing one-third of the outstanding portfolio.
Dedicated non-banking finance companies (microfinance institutions) continued to hold the largest share in the market, commanding 37.3 percent of the overall MFI loans. Banks followed closely at 33.1 percent, while small finance banks accounted for 16.6 percent of the market.
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