Bihar Surpasses Tamil Nadu as State with Highest Microlending Borrowings
Bihar Surpasses Tamil Nadu as State with Highest Microlending Borrowings: According to a new survey, Bihar has surpassed Tamil Nadu as the state with the biggest microlending borrowings in India as of March 2023. The report, published by credit information company Crif High Mark, highlighted Bihar’s impressive growth with a 13.5 percent increase in the gross lending portfolio during the March quarter compared to the previous quarter.
Daily Current Affairs Quiz: July 2023
Bihar’s Impressive Growth in Microlending Sector Outshines Tamil Nadu
As of March 2023, Bihar’s microfinance (MFI) borrowings amounted to Rs 48,900 crore, accounting for 14.5 percent of the overall portfolio. Meanwhile, Tamil Nadu’s MFI borrowings totaled Rs 46,300 crore, accounting for 13.7% of the total outstanding. Bihar’s expanding significance in the microfinance sector is reflected in this major shift in rankings.
Overall Microlending Portfolio in India Witnesses Significant Growth
The overall MFI portfolio outstanding witnessed substantial growth, reaching Rs 3.37 lakh crore by the end of March, reflecting a 17.9 percent increase. The report also highlighted an improvement in asset quality. The proportion of MFI loans that were late for more than 90 days fell from 2% in December 2022 to 1.1 percent in March 2023.
Among the top ten states, Bihar’s climb to the top was accompanied by Uttar Pradesh, Karnataka, West Bengal, Maharashtra, Madhya Pradesh, Odisha, Rajasthan, and Kerala, which combined account for 85 percent of the outstanding portfolio. These states have experienced significant growth in microfinance borrowings, contributing to the overall strength of the sector.
Non-Banking Finance Companies Lead Microlending Market, Followed by Banks and Small Finance Banks
The report further revealed that the average exposure per borrower in Bihar was Rs 27,200, slightly higher than Tamil Nadu’s Rs 26,600. Furthermore, India’s eastern region dominated the MFI scene, accounting for one-third of the outstanding portfolio.
Dedicated non-banking finance companies (microfinance institutions) continued to hold the largest share in the market, commanding 37.3 percent of the overall MFI loans. Banks followed closely at 33.1 percent, while small finance banks accounted for 16.6 percent of the market.
Important takeaways for all competitive exams:
- Bihar Chief minister: Nitish Kumar;
- Bihar Governor: Rajendra Arlekar;
- Bihar Capital: Patna.