MicroFinance Institutions Network said microfinance in creates 1.3 crore jobs per yearThe microfinance business has grown 16.5 times to Rs 2,85,441 crore in the past ten years, according to India Microfinance Review FY 2021-22.The portfolio of the sector was Rs 17,264 crore as on March 31, 2012. This was just two years after the sector was hit by the Andhra Pradesh crisis of 2010.Through a law, the Andhra Pradesh government had curbed the activities of microfinance institutions (MFIs) following complaints of coercive collection practices.In the annual review, the MicroFinance Institutions Network (MFI) said microfinance in India creates 1.3 crore jobs per year.“As per an NCAER study commissioned by MFIN, microfinance in India contributes 2.03 per cent to the gross value added and creates/ sustains 1.3 crore jobs per year. This is an enormous contribution in local level job creation, economic growth and associated benefits like social mobility and checking urban migration,” MFIN said.The study has considered 2018-19 as the reference year for estimating the contribution of the microfinance sector to the economy, as the latest year for which many of the parameters for the calculations are available is that year.While non-banking finance companies were the only entities providing microfinance, regulations allowed banks in 2016 and small finance banks were added the next year.“As of March 2022, about 202 different entities were active in the microfinance space. Banks hold the largest share of the portfolio with a total loan outstanding of Rs 1,14,051 crore, 40.0 per cent of the total micro-credit universe,” said the annual review.NBFC-MFIs are the second largest provider of micro-credit with a loan amount of Rs 1,00,407 crore, accounting for 35.2 per cent of the total industry portfolio.According to the annual review, the MFIs are now comfortable lending bigger loans to clients in higher cycles to those with a good credit history. It is reflected in the loan size that has increased by 6 per cent since FY 2019-20 from Rs 34,467 to Rs 39,829 in FY 20-21.Featured Video Of The DayIndia’s Forex Reserves Fall To Lowest Since July 2020
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