Portfolio at Risk between 31 days and 180 days went up by more than three times for all the players
Chennai: Micro loan disbursements in the December quarter de-grew by 20 per cent even as the delinquencies shot up three-fold against the same last year.
Portfolio at Risk between 31 days and 180 days went up by more than three times for all the players. NBFC-MFIs saw PAR 31-180 shoot up from 1.8 per cent in Q3 FY24 to 6.7 per cent in Q3 FY25. Similarly, banks saw delinquencies rise from 2.3 per cent to 6.8 per cent, small finance banks 2.8 per cent to 7.2 per cent, and NBFCs 1 per cent 3.7 per cent, according to MFIN.
The micro lenders also saw a quarterly jump in delinquencies. NBFC-MFIs saw a quarterly surge from 4.4 per cent at the end of September quarter to 6.7 per cent in the December quarter, banks from 4.4 per cent to 6.8 per cent, SFBs 5.4 per cent to 7.2 per cent, and NBFCs 2.6 per cent to 3.7 per cent.
This saw a dip in disbursements and decline in the portfolio of the players due to the risk of increasing delinquencies.
At the end of December quarter, the gross loan portfolio declined by 3.53 per cent to Rs 3,85,348 crore against Rs 4,08, 049 crore in Q2 FY25 and Rs 3,99,442 crore in Q3 FY24. The portfolio of NBFC-MFIs has declined yearly by 3.8 per cent from Rs 1.56 lakh crore to Rs 1.50 lakh crore, banks by 5.5 per cent from Rs 1.33 lakh crore to Rs 1.26 lakh crore, SFBs by 11 per cent from Rs 70,449 crore to Rs 62,686 crore. However, NBFCs increased their portfolio by 22.2 per cent from Rs 35,744 crore to Rs 43,675 crore.
Disbursements fell by 20 per cent from Rs 78,584 crore to Rs 62,817 crore and the number of loans fell from 166 lakh to 118 lakh. However, the average loan size kept increasing from Rs 47,374 to Rs 53,350.
“Industry is going through a period of curtailed funding and stricter credit underwriting based on MFIN guardrails which has led to lower disbursements leading to a fall in GLP.
The credit quality continued to be under close watch with slippages expected to have peaked by 31 December. MFIN expects that the situation on both liquidity and credit quality will improve in Q4.” Alok Misra, CEO and Director, MFIN said.
