Growth scope in households need to be tapped: MFIs
Misra told reporters here that the potential for the MFI sector is to have an outstanding of Rs 13 lakh crore, adding that there is a huge scope for growth
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KOLKATA: Micro-finance Institutions (MFIs) have sought more penetration in terms of household coverage to increase their portfolio of disbursements, an official said on Monday.
CEO and director of Microfinance Institutions Network (MFIN) Alok Misra said there are 7.3 crore low-income borrowers in the country at present with an outstanding portfolio of Rs four lakh crore.
Misra told reporters here that the potential for the MFI sector is to have an outstanding of Rs 13 lakh crore, adding that there is a huge scope for growth.
In West Bengal, the total outstanding of the MFIs is around Rs 35,000 crore covering 65 lakh borrowers.
Nine per cent of the overall outstanding portfolio is from West Bengal, he said.
MD of Arohan Financial Services Manoj Nambiar said that there is under-penetration of MFI coverage in the country at present.
This penetration needs to grow, he said.
Kuldip Maity, MD of VFS Capital, said that historically the average levels of NPAs in the MFI sector is less than one per cent.
Maity said MFIs will play an important role in the sustainable growth of the economy. Misra said the MFI sector is seeking a guarantee scheme for the loans for which the individual entities will pay a small premium. The sector is also looking for a financial institution to be dedicated only for refinancing small MFIs.
The 8th Eastern India Microfinance Summit to be organised by the West Bengal chapter of the Association of Microfinance Institutions will be held on February 22.
In West Bengal, the total outstanding of the MFIs is Rs 35,000 crore or so covering 65 lakh borrowers. The eighth MFI summit is to be held on February 22