The stress on micro-loans seems to be easing with a drop in portfolio at risk in the over 30 days arrears (DPD) tranche to 9.2% in December 2021 compared to 10.4% in September 2021. Write-offs also fell from 5.1% in September 2021 to 4.4% in December 2021, according to the CRIF Highmark report.
The DPD for those aged 30 and over was 15% in March 2021 and 9.5% in December 2020.
However, loan origination suffered in the quarter due to concerns over the surge in Omicron. Loans disbursed were 14.7 million in the third quarter ended December 2021, down 21% from loans disbursed in the quarter ended September 2021. The decline was 23.5% on an annual basis (YoY ). Loan origination in the quarter under review was Rs 57,600 crore, down 11.8% sequentially and 6.8% on an annual basis.
CRIF High Mark in its quarterly publication MicroLend said the surge in Covid-19 cases in India associated with the Omicron variant, impacted microloans in Q3FY22, marked by lower disbursements. However, lenders are hoping that the recent extension of the emergency line of credit guarantee program for another year will provide the necessary boost to the microfinance sector in the coming months.
The outstanding portfolio of the microfinance sector stood at 2.63 trillion rupees as of December 2021, showing growth of 5.9% YoY and 10.4% YoY, he said. added.