Loan disbursed by non-banking companies acting as Micro Finance Institutions (NBFC-MFIs) rose by 45.8 per cent year-on-year to Rs 30,398 crore in April-June 2023 (Q1 FY24) as against Rs 20,845 crore in April-June 2022 (Q1 FY23), according to Micro Finance Institutions Network (MFIN) data.

The surge in disbursements should be seen in the context of a slowdown in activity in April-June 2022, when lenders were in the midst of reorganising working operations as the Reserve Bank of India (RBI) revised regulatory norms. The changed norms provided a level playing field for NBFC-MFIs vis-a-vis banks, which are also formidable players in the microfinance space.

Sequentially, however, the disbursements were much lower compared to Rs 41,490 crore in January-March 2023 (Q4 FY23), the final quarter of the financial year ended March 2023 (FY23).

The loans were disbursed through 6.89 million accounts in Q1 FY24, up from 5.1 million accounts a year ago. Sequentially, the number of accounts through which loans were disbursed declined compared to 9.5 million accounts in Q4 FY23.

The average loan amount disbursed was Rs 44,114 per account during Q1 FY24, an increase of around 8.3 per cent in comparison to the same quarter of the last financial year, MFIN said.

Assets Under Management (AUM) grew to Rs 1,26,053 crore in June 2023 from Rs 89,005 crore a year ago and Rs 1,21,326 crore as of end-March 2023.

In keeping with the rise in business activity, micro-lenders added 2,500 branches in 12 months, taking the strength of the branch network to 17,706 at the end of June 2023, as against 15,202 a year ago.

Referring to raising money, NBFC-MFIs received a total of Rs 15,708 crore in debt funding in Q1 FY24, which is 65.7 per cent higher than in Q1 FY23. Banks contributed the most, with a share of 64.5 per cent of the total borrowing received, followed by External Commercial Borrowings at 13 per cent, non-bank entities at 12 per cent and All India Financial Institutions at 6.4 per cent.

The outstanding borrowings were Rs 93,113 crore at the end of June 2023, up from Rs 69,474 crore a year ago and Rs 90,902 crore at the end of March 2023.

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