Microfinance market reports a small rise in early stage delinquency

Kolkata: The share of microfinance portfolio turning overdue early rose in April while the later stage portfolio at risk showed improvement, data from CRIF high Mark showed.

The portfolio at risk (PAR) for the 1-30 day bucket rose to 0.8% in April from 0.6%.

Head of microfinance lenders said that there is no additional stress while the marginal rise reflects April being the slack month for business.

“The first quarter is always a difficult quarter for business and the rise in early delinquency is only a reflection of this,” chairman HP Singh told ET. “Till now there is not much uncertainty around macroeconomic conditions and resultant impact on microfinance,” he said.

Delinquency levels in PAR 1–30 inched up slightly across lenders, except for non-banking financial companies, CRIF High Mark said in its latest report published Wednesday.

“In the other buckets, delinquency mostly improved across lender types,” the credit information company said.

The PAR ratio for 1-180 days was recorded at 2.5% in April as compared with 2.6% in the preceding month.

The microfinance portfolio outstanding remained broadly stable at Rs 3.31 lakh crore at the end of April while the number of active loans continued to decline in April to 10.6 crore from 10.5 crore a month prior.