Page 19 - Banking Finance December 2023

MUTUAL FUND

Mutual Fund

News

In FY23, the microfinance All things considered, the industry has degrowth of the portfolios in West
expanded more than 20 times, from Bengal and Assam offset the growth in
sector added up to 80 lakh Rs. 17,264 crore in March 2012 to Rs. these two states. The continued con-

female clients. 3.48 lakh crore in March 2023. flict may cause Manipur to shrink even
more in the upcoming months.
According to the India Microfinance 211 organizations were operating in
Review FY23 report, the microfinance the microfinance sector as of March Before the Andhra Pradesh crisis, the
industry (MFI) in the nation welcomed 31, 2023. NBFCMFIs accounted for 82 South was the center of microfinance;
80 lakh new women clients in 2022- organizations, making them the big- now, it is quickly catching up to the East
2023, bringing the total number of low- gest microcredit provider. and North East. With prospects in
income women clients to 6.64 crore Telangana and AP opening up, South is
NBFCMFIs, with a dominant 39.7%
throughout 729 districts through 12.96 projected to grow much more.
position in the industry's portfolio, are
crore active loans as of March 2023. essential to the growth of In FY23, the average ticket size for
When comparing FY23 to FY22, the microfinance. The noteworthy loan microfinance loans disbursed was Rs.
microfinance business observed an in- amount of Rs. 1,38,310 crore that is 41,391, up 6.3% year over year from
crease in portfolio outstanding and an still outstanding "demonstrates their Rs. 38,929 in FY22.
improvement in portfolio quality; this strong commitment to financial inclu-
is a favorable development that bodes sion and empowerment," stated Vikas AMCs may be charged by
well for the industry. Singh, CEO and co-founder of the Delhi- direct mutual fund entities
As of March 31, 2023, the aggregate based NBFC Sugmya Finance Pvt Ltd. up to Rs. 2 each transac-
portfolio of the microfinance sector, Regionally speaking, the portfolio dis-
comprising all regulated firms (Banks, tribution shows that the shares of the tion: AMFI
SFBs, NBFCs, and NBFCMFIs) operating East and North-East are steadily fall- The Association of Mutual Funds in In-
under the MFI model, stood at Rs. ing, while the shares of the North, dia (AMFI) has released guidelines for
3,48,339 crore. West, Central, and Southern regions online platforms registering under the
With the exception of the Covid period, have all increased. Category-I (Cat-I) of execution only
the portfolio has consistently increased Despite the ascent of Bihar as the lead- platform (EOP) framework. These
over the past five years. It further ing state in terms of portfolio out- guidelines state that platforms selling
stated that the sector's outstanding standing as of December 31, 2022, and direct plans of mutual funds (MFs) may
portfolio increased by 22% in the pre- Jharkhand's excellent growth, the now charge asset management com-
vious fiscal year, a sign of prudent overall share of East and NorthEast fell panies (AMCs) up to Rs 2 for each
growth and latent demand for from 37.7% as of March 31, 2022, to transaction.
microloans. 34.9% as of March 31, 2023. The "In consultation with and guidance

BANKING FINANCE | DECEMBER | 2023 | 17