: Microfinance to grow 1215% FY22 : ICRA #FinanceIndia #StockMarketNEWS Microfinance to grow 12-15% FY22 : ICRA New Delhi, 30 Dec (KNN) The Credit Rating Agency, ICRA has estimated that microfinance
@stockMarketNEWS Fri 31 Dec, 2021
Microfinance to grow 1215% FY22 : ICRA #FinanceIndia #StockMarketNEWS
Microfinance to grow 12-15% FY22 : ICRA New Delhi, 30 Dec (KNN) The Credit Rating Agency, ICRA has estimated that microfinance institutions in FY2022 will see better growth prospects due to encouraging factors such as healthy demand in the industry and increasing economic activity.
It has also said that the collections by MFIs have leveled up to that of March 2021.
Speaking on this growth prospect, Sachin Sachdeva, Vice President and Sector Head, Financial Sector Ratings, ICRA, said, “The disruptions caused by the second wave impacted the AUM growth of the industry in H1 (April-September) FY2022 as the movement of people was greatly hindered and the entities focused on collections instead of disbursements.
He further said that, the pandemic-induced disruptions moderated the portfolio growth to around 5 per cent (annualised) in H1 FY2022 as compared to growth of 9 per cent in FY2021.
“The aforementioned favourable factors provide hope for better growth prospects in FY2022 with an estimated growth rate of 12-15 per cent,” he added.
The Credit Rating Agency has also noted that the asset quality metrics weakened quite sharply in H1 FY2022 because of the localised lockdowns imposed by various states/ union territories (UTs) on account of the second wave, which impacted the borrowers’ cash flows, and hence the CE.
The Vice President speaking about the expected improvement in business during H2 (October-March) FY2022, has said that the persisting asset quality pressures would keep the credit costs elevated and consequently the profitability subdued in FY2022.
“Nevertheless, the growth in the AUM in FY2022 is expected to be better compared to FY2021. Further, the ability of MFIs to recover from overdue/restructured accounts would remain monitorable,” he stated.