Asset quality pressures in microfinance appear easing with loans in the 30 plus day dues (30 plus DPD) bucket declining to 10.4 per cent in September 2021 from 15 per cent in June 2021. The 90=plus DPD remained stable at 3.3 per cent in September like that in June, according to credit information bureau CRIF High Mark.

       The 30 plus DPD was 9.5 per cent in March 2021 and it was 4.4 per cent for the 90 plus DPD bucket the same period. The comparison with numbers for September 2020 is less useful due to the moratorium granted on repayments for March-August 2020 to tackle adverse effects on the first wave of COVID19 pandemic. Also, the Supreme Court had granted interim stay on labelling accounts as non-performing loans.

       The gross loan portfolio (GLP) in microfinance rose by 2.1 per cent growth at Rs 2.49 trillion at end of September 21 over Rs 2.43 trillion at end of June 2021. This came after nearly seven per cent Q-o-Q decline in the previous quarter (Q1Fy22), which was marked by adverse impact of second wave of COVID19 pandemic. The GLP was Rs 2.61 trillion in March 2021.

       The year-on-year growth in GLP was six per cent as of September 2021. The GLP was at Rs 2.35 trillion as of September 30, 2020.

       The urban as well as rural regions showed a sequential rise in GLP in Q2Fy22 over Q1Fy22, a sign of broad-based recovery in economic activity.

       Not only small businesses but also microfinance institutions lending to such businesses suffered great losses due to the second COVID 19 wave in Q1 FY22. While the effects continue to linger, the second quarter marked a turnaround for the microfinance industry with increase in disbursements. However, lenders still need to be cautious about asset quality, CRIF said in a review.

       Signalling scope for fresh business, CRIF data showed that new-to-credit (NTC) inquiries between July 21 to September 21 in the range of 18-20 per cent. NTC inquiries inched up at 24 per cent higher at 24 per cent in October 2021.