West Bengal regains spot as the largest state in terms of microfinance loan outstanding

West Bengal has regained its spot as the largest state in terms of microfinance loan outstanding, replacing Tamil Nadu while Bihar remained in the third position.
Microfinance loan outstanding in West Bengal was Rs 34,853 crore at the end of December 2020, followed by Tamil Nadu's Rs 31,520 crore and Bihar's Rs 25,247 crore, associating to data shared by Microfinance Institutions Network, a self-regulator for the sector.

Three month's back Tamil Nadu was leading with Rs 34,141 crore while West Bengal had Rs 32,881 crore. Bihar had Rs 24,984 crore loan outstanding.

The Top 10 states constitute about 82% of the Rs 2.33 lakh crore microfinance loan universe, which does not include bank loans given to self help groups.

Portfolio at risk over 30 days (PAR>30) was 10.9% as on December 31, 2020, showing a sharp deterioration from 2.42% in the year ago period, mainly due to the impact of the pandemic.

The sector catered to 5.83 crore unique borrowers, through 10.50 crore loan accounts. The overall microfinance industry had a total loan portfolio of Rs 2,32,648 crore at the end of December 2020, showing a 10% growth year-on-year and rebounding to the pre-covid levels.

According to MFIN data, 14 banks including Bandhan Bank hold the largest share of micro-credit portfolio with Rs 97,956 crore loan outstanding, which is 42.10% of sectoral credit. NBFC-MFIs are the second largest provider of micro-credit with a loan amount outstanding of Rs 72,128 crore, accounting for 31%. Small finance banks have a total loan amount outstanding of Rs 39,062 crore with 16.79% share while NBFCs and other MFIs account for the balance amount.