Microfinance self-regulator expects stress to stabilize by January
1 month, 2 weeks ago

Microfinance self-regulator expects stress to stabilize by January

Live Mint  

Mumbai: Microfinance Institutions Network, the self-regulatory organization for the sector, expects the current bad loan stress that microlenders face to stabilize by January next year with new rules in place. The sector’s self-regulatory organization made key changes including reducing the number of lenders to a borrower to 3 from 4 earlier, and capping the maximum indebtedness of a borrower at ₹2 lakh, including both micro and unsecured retail loans. Under the new guidelines, the MFIN has also requested its members to stop lending to delinquent customers who have overdue loans for more than 60 days with an outstanding amount more than ₹3,000. Last month, RBI banned two microlenders—Asirvad Micro Finance Ltd and Arohan Financial Services Ltd—for charging usurious rates and non-adherence with the regulatory guidelines on assessment of household income and consideration of existing or proposed monthly repayment obligations in their microfinance loans.

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MFI portfolio declines, bad assets spike in Sept qtr: Report
3 days, 2 hours ago

MFI portfolio declines, bad assets spike in Sept qtr: Report

Live Mint  

Mumbai, Jan 8 Microlending outstandings in the system reduced 4.3 per cent to ₹4.14 lakh crore in the September quarter as lenders adopted a cautious stance amid deteriorating asset quality, a report said on Wednesday. Loans unpaid for 1-30 days increased to 2.1 per cent from the 1.2 per cent in June, while the ones unpaid for 31-180 days witnessed …

Microfinance self-regulator defers capping lenders per borrower to 1 April
1 week, 2 days ago

Microfinance self-regulator defers capping lenders per borrower to 1 April

Live Mint  

Mumbai: Microfinance Industry Network, the self-regulatory organization for the sector, has deferred the implementation of limiting the number of lenders to three per borrower to 1 April, giving lenders more time to manage stress and delinquencies, according to two persons aware of the matter. "MFI players wanted to end the year on a good note and hence they felt that …

Microfinance stress not alarming, says RBI deputy governor Swaminathan
1 month ago

Microfinance stress not alarming, says RBI deputy governor Swaminathan

Live Mint  

The Reserve Bank of India believes that the stress in microfinance loans is not alarming, deputy governor Swaminathan J said on Friday, even as data showed rising repayment delays by borrowers. At the end of June, 2.5 million microfinance borrowers had loans from five or more lenders each, up 17.2% from the same period last year, showed data from credit …

Microlenders wake up to hangover after credit party
1 month, 2 weeks ago

Microlenders wake up to hangover after credit party

Live Mint  

Mumbai/Bengaluru: Microlenders that splashed out money to indebted individuals are now struggling to get it back, raising concerns that payment delays could show up on balance sheets soon. Leading microfinance companies including CreditAccess Grameen, Fusion Finance and Equitas Small Finance Bank have warned that many of their customers may be over-leveraged, after discovering that some have four or more active …

Microfinance meltdown: Five stocks that could come out on top
1 month, 3 weeks ago

Microfinance meltdown: Five stocks that could come out on top

Live Mint  

The microfinance sector is facing a severe downturn, with every small finance bank and non-banking finance company involved in microlending seeing declines of 30-50%. Equitas Small Finance Bank estimates that around 50% of loans overdue by 90 days eventually become NPAs, though this figure varies across lenders. Equitas Small Finance Bank, Ujjivan Small Finance Bank, CreditAccess Grameen Ltd, and Arman …

Microfinance risk: Small loans can spell big trouble for Indian banks
1 month, 4 weeks ago

Microfinance risk: Small loans can spell big trouble for Indian banks

Live Mint  

Once bitten twice shy" goes the old adage. Driven perhaps by the lack of credit demand from corporates, a boom in retail credit, an eagerness to bridge the last- mile gap in credit delivery and pressure to achieve priority-sector lending targets, banks seem to have lowered their guard and gone overboard in extending such loans. To its credit, the Reserve …

Private Banks Brace for Credit Card and Loan Stress in Q2
2 months, 3 weeks ago

Private Banks Brace for Credit Card and Loan Stress in Q2

Live Mint  

Private banks continue to see stress in small-ticket advances, with all lenders barring HDFC Bank reporting a spike in bad loans. Axis Bank's gross slippages jumped 36% year-on-year to ₹4,443 crore, led by unsecured loans. Kotak Mahindra Bank's slippages were up 42% year-on-year, with a significant rise in bad loans in the credit card and microfinance portfolios.

MFI Risks Rise with Overleveraging in Bihar, UP
4 months, 2 weeks ago

MFI Risks Rise with Overleveraging in Bihar, UP

Deccan Chronicle  

Chennai: Increasing borrower leverage, especially in states like Bihar and Uttar Pradesh, is a key concern for the micro-finance segment. For MFI borrowers, the check on household leverage becomes paramount, as improved availability of loans from MFI players, government loans, Kisan Credit Card loans, mudra loans, gold loans, and other fintech loans could overleverage the end MFI borrower, impacting repayment …

Microfinance lenders go for secured loans to diversify risk
2 years, 1 month ago

Microfinance lenders go for secured loans to diversify risk

Live Mint  

A clutch of microfinanciers is venturing into secured asset classes such as mortgages and gold loans to diversify their portfolio and balance the risk of unsecured microlending with loans that require collateral. The strategy change took shape after a Reserve Bank of India circular in March allowed microfinance institutions to lend 25% of their total assets in non-microfinance loans. Mid-caps, …

Up to 10% credit losses for MFIs in COVID years
2 years, 2 months ago

Up to 10% credit losses for MFIs in COVID years

Deccan Chronicle  

Mumbai: Small loan specialists that cater to people without bank accounts suffered credit losses of up to 10 per cent during the two years of the Covid pandemic, but recovered with stressed asset levels halving with the economy opening up. At a virtual press meet of the Microfinance Institut-ions Network, its CEO and director Alok Misra said the cumulative credit …

Microfinance industry posts 43% growth in loan portfolio to Rs 1.66 lakh cr in December quarter: Report – Firstpost
5 years, 10 months ago

Microfinance industry posts 43% growth in loan portfolio to Rs 1.66 lakh cr in December quarter: Report – Firstpost

Firstpost  

Microfinance industry posted 43.1 percent growth in December quarter 2018 as compared to the year-ago period, with a total loan portfolio of Rs 1,66,284 crore, a report by MFIN said on Monday New Delhi: Microfinance industry posted 43.1 percent growth in December quarter 2018 as compared to the year-ago period, with a total loan portfolio of Rs 1,66,284 crore, a …

Microfinance industry clocks over 50% growth in Q2 with GLP standing at Rs 1,46,741 crore
6 years, 1 month ago

Microfinance industry clocks over 50% growth in Q2 with GLP standing at Rs 1,46,741 crore

India TV News  

Microfinance industry recorded a growth of 51 per cent year-on-year in the second quarter of 2018-19 with total Gross Loan Portfolio standing at Rs 1,46,741 crore, said a report Monday. While the total number of active microfinance accounts for the overall industry was at 7.77 crore with a growth of 27 per cent, NBFC-MFIs witnessed a growth of 32.9 per …

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