Nifty99000 100%

Sensex99000 100%

Article rating: 3.7
Article rating: 4.2
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 3.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 3.0
Article rating: 4.5
Article rating: 5.0
Article rating: No rating


Asset quality of microfinance institutions improves: Crisil

Author: IANS/Friday, February 23, 2018/Categories: Banking & Financial Services

Asset quality of microfinance institutions improves: Crisil

New Delhi - Asset quality of microfinance institutions (MFI), including small finance banks, has come out of the impact of demonetisation and stabilised since June 2017, a Crisil report said.

"Portfolio delinquencies, for a representative set of MFIs, measured in terms of 30 and 60 days past due (dpd), have improved to 5.6% and 5.3%, respectively, as on December 2017, compared with 7.6% and 6.8%, respectively, as on June 2017," the report said.

Asset quality has improved, as evidenced by reducing portfolio delinquencies, the rating firm said in its report, adding that "cumulative collection efficiencies have risen to over 99% for disbursements since April 2017".

High degree of investor support was reflected in the significant equity and debt raised after demonetisation, the report noted.

"The reduction in delinquencies shows that borrowers are paying more than one instalment and there is recovery in the higher-delinquency buckets," said Krishnan Sitaraman, Senior Director, CRISIL Ratings.

However, the weakening in asset quality was not pervasive post demonetisation, as per the rating firm. 

Asset quality of MFIs in Tamil Nadu, Kerala, Odisha, West Bengal and Bihar remained largely resilient despite demonetisation and its aftermath, and these states continue to exhibit strong collection performance with 30 dpd staying below 2%, it said.

Improvement in asset quality performance in Uttar Pradesh, Maharashtra and Karnataka has been significant, which were affected the most due to demonetisation, according to the report.

In Uttar Pradesh, 30 dpd reduced to an estimated 14% as on December 2017 from 23% in June 2017, it showed. 

Strong investor appetite for both equity and debt capital market issuances has helped MFIs tide over the challenges, it said.

"Since demonetisation, CRISIL estimates MFIs have raised around Rs 4,000 crore of equity and Rs 7,000 crore of debt. Additionally, banks and refinance institutions also continue to extend funding to MFIs."

Print Rate this article:
No rating

Number of views (110)/Comments (0)

rajyashree guha


Other posts by IANS
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free