According to a research, Bihar overtook Tamil Nadu and become the Indian state with the biggest micro-lending borrowings as of March 2023. With a 13.5 % increase in the gross loan portfolio during the March quarter compared to the previous quarter.
Borrowings from microfinance institutions (MFIs) in Bihar totaled Rs 48,900 crore as of March 2023, or 14.5% of the total portfolio. The amount borrowed from MFIs by Tamil Nadu at the time was Rs 46,300 crore, or 13.7% of the total amount owed. This considerable change in rankings shows the growing importance of microfinance in Bihar.
The survey also showed that Bihar’s average exposure per borrower was Rs 27,200, just a little bit more than Tamil Nadu’s average exposure of Rs 26,600. Additionally, the eastern region of India dominated the MFI landscape, representing one-third of the outstanding portfolio.
India’s overall micro-lending portfolio has seen major growth
The overall MFI portfolio outstanding witnessed substantial growth, reaching Rs 3.37 lakh crore by the end of March, reflecting a 17.9 % increase. The report also highlighted an improvement in asset quality. The proportion of MFI loans overdue for over 90 days decreased to 1.1 % in March 2023, compared to 2 percent in December 2022
Among the top ten states, which collectively account for 85 % 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.
Who is holding MIF market position in India
non-banking finance organizations (microfinance institutions) maintained their dominant market position With 37.3 % and Banks followed closely at 33.1 %, while small finance banks accounted for 16.6 % of the market.