New Delhi [India], January 9 : The business of Micro Finance Institutions (MFIs) industry has risen from Rs 17,264 crores in March'12 to Rs. 3.93 lakh crore as of November'24, M Nagaraju, Secretary, DFS, Ministry of Finance was apprised by the industry representatives during a meeting in New Delhi.
As per the MFI stateholders, the industry has grown more than 2176 per cent over 12 years.
The Ministry of Finance stated in a release DFS Secretary chaired a meeting with major Micro Finance Institutions. The meeting was also attended by senior officials of DFS including industry bodies namely MFIN & Sa-Dhan.
The engagement with MFIs was designed to foster an open exchange of ideas aimed at elevating the MFI sector. The emphasis was on reaching low-income households in villages and uplifting their lives by providing them with hassle-free financial assistance if needed.
Participating MFIs apprised that the business of the MFI industry has risen from Rs. 17,264 crores in March'12 to Rs. 3.93 lakh crore as of November'24.
The industry operates in over 723 districts including 111 aspirational districts across 28 states and 8 Union Territories.
They also cater to the financial needs of almost 8 crore borrowers. MFIs contribute 2.03 per cent of the gross value added to GDP and support 1.3 crore jobs.
During the meeting, challenges & issues being faced by MFIs were also discussed. It was informed that MFIs are facing difficulties in raising low-cost long-term funds. The quality of the MFI portfolio is being impacted on account of various issues including a reduction in lending to the sector.
The MFIs requested to formulate credit guarantee scheme(s) suiting MFIs/borrowers, creation of special funds/facilities for MFIs operating in North East region and relax qualifying assets norms applicable to MFIs so that their risk can be diversified to other lending avenues.
Secretary, DFS emphasised that MFIs in India need to be more robust, vibrant and financially sound, catering to the needs of rural masses. MFIs need to draw a roadmap to strengthen the sector and become more viable, he said.
It was also pointed out that like digital disbursements, MFIs should encourage repayment of loans digitally while at the same time focusing on cybersecurity & resilient IT infrastructure. They should also strengthen their governance standards.
During the meeting, the Secretary of DFS recognized the work done by MFIs in impacting the lives of people in rural areas. He stated that DFS value the efforts put in by MFIs in supporting financial inclusion.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor