Micro lenders staring at Rs 3,000 crore loss due to demonetisation




Kolkata: The microfinance sector is staring at around Rs 3,000 crore loss due to demonetisation led non repayment of dues, said Sa-Dhan, the association of community development finance institutions.

Pure MFIs, and the ones which have now converted themselves into small finance banks, witnessed a decline in their repayment rates, with several leading players reporting portfolio at risk (PAR) in excess of 10%, Sa-Dhan said, adding that MFIs, which have significant exposure in states of Maharashtra, Madhya Pradesh, Uttar Pradesh, Uttarakhand and Karnataka, continue to experience problems in their loan portfolios.

“Though there has been an improvement in collections, PAR 1-180 still looms at over 11%,” said credit information firm Crif High Mark.

The finding was part of the Bharat Microfinance Report 2017, released by Sa-Dhan Wednesday.

The industry observed a sharp rise in PAR 30-180 level which denotes portfolio at risk for 30-180 days delays in repayment to 10.5% by March 2017 from 0.33% earlier.

Sa-Dhan executive director P Satish told ET that the organisation has estimated the loss to be about Rs 450-500 crore for the pure MFIs.

“Such a stress on portfolio quality was observed first time since the Andhra Pradesh Crisis of 2010,” the report said.




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