Jul 1, 2013 - What is the risk involved in lending to microfinance institutions? ..... repayment discipline through group co-guarantees, peer pressure, joint ...
Microfinance in India Sector Overview – FY ended March 2014
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Microfinance in India - Sector Overview - FY ‘14
Contents 1.
Basic Concepts of Microfinance in India ......................................................................................................... 4 i.
What is microfinance? ................................................................................................................................ 4
ii.
Why is microfinance usually associated with “groups” of borrowers? ...................................................... 4
iii.
Why are microfinance borrowers mostly women? .................................................................................... 5
iv.
Why is it difficult for banks to fulfil the need for financial services? .......................................................... 5
v.
Who provides microfinance in India? ......................................................................................................... 5
vi.
Who regulates MFIs? What are the regulatory frameworks in place? ....................................................... 6
vii.
What is the market demand for microfinance services in India? ........................................................... 6
viii.
What are microfinance loans used for? .................................................................................................. 6
ix.
What is the risk involved in lending to microfinance institutions? ............................................................. 7
x.
Why do MFIs charge higher rates of interest?............................................................................................ 7
xi.
Are there any restrictions on lending rates specified by the regulator? .................................................... 8
xii.
Despite high interest rates, why do borrowers still prefer to take loans from MFIs? ............................ 8
xiii.
How can indebtedness of these borrowers be determined since they have no documentation? ........ 8
xiv.
How do the microfinance-specific credit bureaus function? .................................................................. 9
xv.
Why are repayment rates so high, when the borrower profile is so poor? ......................................... 10
xvi.
Do MFIs also collect savings or offer other financial products? ........................................................... 10
xvii.
What was the A.P. crisis? ...................................................................................................................... 11
xviii.
What is the likelihood of another crisis similar to the “A.P. Crisis” occurring? .................................... 12
xix.
Does microfinance really help poor people get out of poverty? .......................................................... 12
xx.
Have MFIs achieved financial inclusion in backward districts? ............................................................ 13
2.
3.
Overview of the Performance of the Microfinance Sector in India .............................................................. 16 i.
Growth in the microfinance sector ........................................................................................................... 16
ii.
Portfolio Quality ........................................................................................................................................ 17
iii.
Credit Bureau reporting ............................................................................................................................ 18
iv.
Productivity ............................................................................................................................................... 19
v.
Flow of funds ............................................................................................................................................. 21
vi.
Tier wise break up of performance metrics .............................................................................................. 25
vii.
Geographical Diversification ................................................................................................................. 25
Regulatory Atlas for MFIs .............................................................................................................................. 28
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Table of Figures Figure 1: Credit Penetration as per CRISIL Inclusix Report 2012 .......................................................................... 13 Figure 2: Poverty vs Financial Inclusion as per CRISIL Inclusix score in select States ........................................... 14 Figure 3: Borrowers and portfolio outstanding of MFIs in India across years ...................................................... 16 Figure 4: Loan Disbursements by MFIs (quarterly, Rs. Bn) ................................................................................... 17 Figure 5: PAR 30 ratio for Non-Andhra Pradesh NBFC-MFIs................................................................................. 17 Figure 6: PAR performance across financial years for non-Andhra Pradesh MFIs ............................................... 18 Figure 7: Number of Credit Bureau records created across financial years ......................................................... 18 Figure 8: Average Loan Outstanding per Client across financial years ................................................................. 19 Figure 9: Amount Disbursed per loan account (Rs) across financial years ........................................................... 20 Figure 10: Gross Loan Portfolio and Number of Clients per Branch across financial years.................................. 20 Figure 11: Gross Loan Portfolio and Clients per Loan Officer across financial years ............................................ 21 Figure 12: Flow of Debt funds to the microfinance sector (Rs bn.) across financial years ................................... 21 Figure 13: Pattern of Debt Funding flow to NBFC-MFIs across financial quarters ............................................... 22 Figure 14: Outstanding Borrowing, Total Funding and Securitization transactions across FYs for all NBFC-MFIs22 Figure 15: Trends in NCD Issuance (Rs bn.) across financial years ....................................................................... 22 Figure 16: Secured and Subordinated NCDs issued across financial years by NBFC-MFIs ................................... 23 Figure 17: NCD Funding to MFIs distributed by portfolio size, across financial years .......................................... 23 Figure 18: Average NCD tenure (in years)............................................................................................................. 24 Figure 19: Equity Deals in FY 13 and FY 14 ........................................................................................................... 24 Figure 20: Tier wise performance metrics of NBFC-MFIs ..................................................................................... 25 Figure 21: NBFC-MFI presence across states (FY 14) ............................................................................................ 26 Figure 22: State wise distribution of Gross Loan Portfolio of NBFC-MFIs, FY 14 .................................................. 26 Figure 23: State wise distribution of borrowers ................................................................................................... 27
List of Tables Table 1: Factors for A.P. crisis and Preventive measures ..................................................................................... 12 Table 2: Credit Penetration by MFIs in select States ............................................................................................ 14 Table 3: Backward districts identified by IFMR Investments ................................................................................ 15 Table 4: Loan Disbursements by MFIs (quarterly, Rs. Bn) .................................................................................... 17 Table 5: Pattern of Debt Funding flow to NBFC-MFIs across financial quarters................................................... 22 Table 6: Tier wise performance metrics of NBFC-MFIs......................................................................................... 25
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Microfinance in India - Sector Overview - FY ‘14
1. Basic Concepts of Microfinance in India i.
What is microfinance?
The term “microfinance” refers to small-ticket-size loans, savings, insurance, remittances and other financial services which meet the particular needs and characteristics of low-income individuals. Microfinance services are based on the premise that people living in poverty need a diverse range of financial services to run their businesses, build assets, smooth consumption, and manage risks, just like people from higher income groups. Microfinance gives low-income groups and those who have been excluded from formal financial services the chance to access institutional financial services rather than relying on informal providers such as moneylenders, informal deposit collectors, etc. who provide these services at high cost and at high risk to borrowers.
ii.
Why is microfinance usually associated with “groups” of borrowers?
Microfinance is based on the understanding that poor people have limited collateral to offer as security and there is limited enforceability over this collateral in the absence of written or registered titles and documentation. Therefore most microfinance products and delivery systems are structured around building repayment discipline through group co-guarantees, peer pressure, joint liability and a variety of similar mechanisms. This is known as “social collateral” since joint liability and responsibility for one’s group members’ loans ensures that each individual chooses group members who are well-known to her, creditworthy, and capable of repaying their loans on time. There are microfinance institutions which lend to individual borrowers, but these are very few and form a negligible proportion of the overall microfinance coverage in India. Most microfinance loans are extended through Joint Liability Groups (JLGs) or Self Help Groups (SHGs). These are described in detail below: Members of a Joint Liability Group (JLG) self-select themselves; groups are not formed by any external influence. If any one or more member(s) in a group defaults in repayment of a loan, then other group members agree to jointly bear the responsibility of repaying such amount on behalf of the member(s) who has/have defaulted, or ensure that the payment is made by the defaulter, using peer pressure. Usually an institution providing loans to JLGs would ensure that there is parity of joint liability within the groups. For example, the difference between loan sizes within a group should not be too high as this might in turn dilute the joint liability or cause repayment problems for those who have to pay on behalf of other members. A Self-Help Group (SHG) comprises a set of persons generally from a homogenous socio-economic background who voluntarily form a group to save regular sums of money in a common fund, and use the pooled funds as well as external resources from banks and microfinance institutions to take loans for mutually agreed purposes. The group members use existing knowledge of one another for a mutual credit assessment and employ peer pressure to ensure proper end-use of credit and timely repayment. The characteristics of SHGs which differentiates them from JLGs include: 1) Group members are not liable to take financial responsibility for one another’s loans. Responsibility is only to the extent of exerting peer pressure on fellow group members. 4
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Microfinance in India - Sector Overview - FY ‘14 2) Not all members may borrow - some only save with the SHG. 3) Groups may be linked to loans extended by third parties (banks, microfinance institutions), other than the institution which mobilized the SHG. 4) Book-keeping and maintenance of group records may or may not be performed by the members themselves. Often it is outsourced to a capable person in the locality for a small fee.
iii.
Why are microfinance borrowers mostly women?
Historically, women have been known to handle money responsibly. Further, in the Indian context, more women are home-makers or conduct businesses within or close to their homes than men. This makes them more accessible for the regular collection meetings. Women are also more likely than men to use the surplus income from their business activity for ploughing back into the business, or for better food, education expenses of children or home improvements – as opposed to wasteful or consumptive expenditure.
iv.
Why is it difficult for banks to fulfil the need for financial services?
Banks are often unable to absorb costs of assessing borrowers who want very low ticket size loans, and who have no collateral to offer, no documentary proof of income or asset holding and no established credit history. For banks it is not cost effective to service such a low profile of borrowers as staff and branch operating costs are high. For low-income borrowers, it is intimidating to approach banks as they are unable to avail banking services due to their lack of literacy, lack of adequate documentation and low transaction volumes. Lowincome borrowers may not be able to travel to a bank branch because this presents an opportunity cost of wages lost and transaction costs of transport. On the other hand, banks are not able to serve such a customer profile in their place of residence.
v.
Who provides microfinance in India?
Microfinance is largely provided by specialized “microfinance institutions” or MFIs. A microfinance institution (MFI) is any institution which offers microfinance services to poor, under-served or financially excluded persons. In India, microfinance institutions are registered as Non-Banking Financial Companies (NBFC-MFIs), Section 25 (Not-for-profit) Companies, Trusts, Societies and Cooperatives. However, most of the large, multistate operating companies function as NBFC-MFIs as this legal form provides for ease in raising equity, and has the benefits of recognition and regulation by the Reserve Bank of India (RBI). Microfinance is also provided by banks - which undertake microfinance activities through Self Help Groups (SHGs), primarily funded through a special NABARD-linked programme called the SHG-Bank Linkage programme (SBLP). Sometimes these programmes also get additional support through subsidized interest, capacity building and incentives for good performance from the state government. There were 44.51 lakh SHGs in India by end of FY 13 and outstanding loans to SHGs amounted to Rs. 394 billion1. The SHG Bank Linkage programme forms a sizeable portion of the overall microfinance outreach in India. In the course of this document we will be focusing exclusively on NBFC-MFIs, when elaborating on delivery of microfinance services.
1
Sage-ACCESS: Microfinance India State of the Sector Report 2013
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vi.
Who regulates MFIs? What are the regulatory frameworks in place?
The Reserve Bank of India (RBI) regulates MFIs which are registered as NBFCs and NBFC-MFIs. However, MFIs registered as Section 25 companies, Trusts, Societies or Cooperatives do not come under the ambit of RBI regulations, although a few of these institutions voluntarily comply with RBI’s directives. After an event of mass default in the state of Andhra Pradesh known as the A.P. crisis (covered in detail later in this section), the Reserve Bank of India set up a committee called the Malegam Committee to investigate the activities and impact of MFIs across the country and to make recommendations on improvement in their functioning. Post the Malegam Committee report (released in January 2011), the Reserve Bank of India issued a set of guidelines to cover the operations of NBFCs functioning as MFIs in March 2012. These guidelines created a new category of Non-Banking Financial Companies (NBFCs) called NBFC-MFI and specified that all NBFCs undertaking microfinance business, having capitalization of Rs. 5 crores and having over 85% or more of their exposure in “qualifying assets” (microfinance portfolio) should apply for an NBFC-MFI license accordingly. These guidelines were further updated eventually, and the Master-Circular for NBFC-MFIs is available at the following link: http://rbidocs.rbi.org.in/rdocs/notification/PDFs/49010713MFIFL.pdf There is also a Microfinance Bill pending in Parliament, namely the Microfinance Institutions (Development and Regulation) Bill, 2012, which was tabled in the Indian Parliament on 29 May 2012. The bill has been modified, but only slightly, from the draft Microfinance Bill made available by the Ministry of Finance, Government of India on its website on 6 July 2011. The draft bill has been welcomed by industry participants as a major step forward in the government’s engagement with the microfinance sector. The Bill will provide MFIs, lenders and investors with an even more stable regulatory framework and enable MFIs to undertake provision of comprehensive financial services including thrift.
vii.
What is the market demand for microfinance services in India?
India’s microfinance outreach is the highest in the world at 30.3 million borrowers till March 2014, of which 27.9 million borrowers are linked with NBFC-MFIs. However, this covers only a small proportion of the total unbanked, underserved potential in the country. Out of a potential market size of Rs 1.5 trillion, the current penetration is only around Rs 600 billion2. India still has 650 million adults who lack access to a formal source of borrowing3.
viii.
What are microfinance loans used for?
Microfinance loans are primarily used for income generation needs supporting borrowers’ self-employment. These include working capital for small businesses, purchase of a productive asset (milch animals, tractors), purchase of working capital (agricultural inputs, business stock), paying an existing high-cost debt from informal sources, or paying children’s school fees. Microfinance borrowers are discouraged from using their loans for conspicuous consumption such as purchase of unproductive assets or spending on festivals and weddings. The loan purpose is documented at the time of loan application, a house-check is usually done to verify that the borrower or her family members are indeed carrying out the stated business activity, and a
2 3
*ICRA, Industry Outlook and Performance of Microfinance Institutions (2013) World Bank Global Findex Survey (2012)
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Microfinance in India - Sector Overview - FY ‘14 Loan Utilization Check is performed 2-3 weeks after the loan disbursement to ensure that the loan has been utilized for its stated purpose. RBI’s Guidelines for NBFC-MFIs mandate that they cannot extend more than 30% of their portfolio for nonincome generating activities.
ix.
What is the risk involved in lending to microfinance institutions?
Historically, there has been very little risk associated with the microfinance sector. Banks have preferred to lend to MFIs as part of their Priority Sector Lending targets because the repayment rates in microfinance loans are upwards of 99%, considerably better than other asset classes. Furthermore, MFIs are now supported by an efficient credit bureau system which enables them to screen out risky borrowers or over-indebted loan applicants before taking a credit decision. However, the inherent risk in lending to MFIs is that the underlying hypothecated assets are uncollateralized, so in the event of a mass default, there is very little recourse on the part of either the MFI or its funders. Furthermore, in case of wilful default, there is hardly any scope for legal action because it is prohibitively expensive and time-consuming. However, lending to MFIs which have strong origination systems in place, diversifying between districts and states, mandating a percentage of cash collateral and hypothecating a higher proportion of book debts against the loan (110-115%) can cover the risk of lending to MFIs to some extent. In the presence of microfinance credit bureaus, the incidence of wilful default has reduced sharply as can be seen from increased collection efficiency rates experienced by MFIs. Since NBFC-MFIs are regulated by the RBI, they have to comply on a variety of product design and process design requirements, which render them less risky than other types of MFIs. One such parameter is capital adequacy which has to be maintained at a minimum of 15% for all NBFC-MFIs, a feature which is absent in other legal forms of MFIs such as Trusts, Societies, etc.
x.
Why do MFIs charge higher rates of interest?
Funding costs are high - MFIs raise funds through equity and debt. Debt is raised mostly from banks, which lend to MFIs as part of their Priority Sector Lending requirements. Such on-lending funds are availed at a relatively high cost (in the range of 12.5-15.5%) depending on the size, scale, vintage and the risk profile of the MFI and the nature of its underlying loans. Operating expenses are high - MFIs provide doorstep service to borrowers at their residence or very close to their place of residence. This involves high operational costs for staffing and travelling. Unlike regular bank loans which are provided through cheque or bank transfers, microfinance loans involve cash disbursements and cash payments. Cash aggregation and movement is a risky and costly activity, and since most MFIs link their branches to local bank branch accounts for cash management, some bank charges are incurred for deposits, withdrawals, etc. Loan loss provisioning requirements – Since MFIs lend uncollateralized loans to borrowers with perceived “low repayment capability”, MFIs are required to maintain provisions of at least 1% of their Gross Loan
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Microfinance in India - Sector Overview - FY ‘14 Portfolio or 50% of the aggregate loan instalments which are overdue for more than 90 days and less than 180 days and 100% of the aggregate loan instalments which are overdue for 180 days or more.
xi.
Are there any restrictions on lending rates specified by the regulator?
RBI, in its capacity as regulator of NBFC-MFIs has specified the maximum lending rate as the lower of the following: The cost of funds plus 10% for large MFIs (size of Rs.100 Crores and above) and cost of funds plus 12% for the others (size less than Rs.100 Crores), or The average base rate (as advised by RBI) of the five largest commercial banks by assets multiplied by 2.75. (Currently around 27.5%) All NBFC-MFIs were required to be compliant with this margin cap on pricing by 1st April 2014.
xii.
Despite high interest rates, why do borrowers still prefer to take loans from MFIs?
Borrowers prefer to take loans from MFIs because these loans offer value to them on a variety of parameters: a) These loans are priced much lower than the informal loans extended by moneylenders, where interest rates could vary from 10% per month (against jewellery) to 10% per day (working capital for vegetable and fruit vendors) b) Microfinance loans do not require any collateral as stipulated by the regulator c) The repayment is convenient because it is split over several small instalments and in frequencies which typically match their cash flows like weekly, fortnightly or monthly which are easy to pay d) Since it is a amortizing structure, the interest charged is based on reducing loan balance unlike a flat rate of interest which are charged on informal borrowings e) MFIs offer doorstep service which is much more convenient than travelling to a bank branch f) MFIs provide extensive training for 2-5 days to the borrowers, educating them about the loan terms and conditions and provide them with highly transparent loan documents and receipts for all repayments g) Most MFI loans are linked to term life insurance on the loan amount which reduces the risk of inability to repay in case the borrower or her spouse dies during the term of the loan h) MFI staff typically follows the Grameen Bank model for the JLG based lending and also for SHG based lending, they follow a behavioural code based on extensive training given by the MFIs when transacting with borrowers – these borrowers are not treated with respect when they approach a moneylender, but are treated as valued customers by the MFIs Most microfinance borrowers may still approach moneylenders occasionally for loans – this occurs when there is a health emergency or critical incident in the household for which money is required immediately. The moneylender who lives in the same neighbourhood being the closest available source of finance is invariably the only resort in such eventualities.
xiii.
How can indebtedness of these borrowers be determined since they have no documentation?
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Microfinance in India - Sector Overview - FY ‘14 Ever since the RBI guidelines have been implemented, all MFIs have to report to at least one of the MFIspecific credit bureaus in the country (High Mark, Equifax and more recently Experian); and have to check every loan application in the credit bureau to establish the level of indebtedness of the applicant. The following thresholds are prescribed by the RBI: Total indebtedness of the borrower should not exceed Rs 50,000 The MFI should ensure that: Borrower does not have more than two NBFC-MFIs loans Borrower cannot be a member of more than one of its SHGs/JLGs It does not lend to a single person as an individual & group borrower simultaneously This ensures that there is very low likelihood of a borrower becoming over-indebted through microfinance loans as it limits both the exposure as well as the number of providers to a single borrower. However, the informal borrowings of borrowers (highly likely) and formal borrowings from banks (highly unlikely) are not captured here. The Code of Conduct issued by the Self-Regulatory Organization for MFIs in India, Microfinance Institutions Network (MFIN), requires member MFIs to participate in a forum to share qualitative credit information. Whenever any member MFI comes across incidents of high default/ mass default, the MFI is required to inform MFIN of the same so that the other member MFIs are made aware of it. However whether any other MFI would further lend to clients in such an area would be the choice of each institution based on their credit policies, and transparency in sharing this decision with other member MFIs is encouraged. In case of any high default incidents faced by one MFI, all member MFIs are called upon to cooperate in a recovery drive and restrain lending in that area till the issue is resolved.
xiv.
How do the microfinance-specific credit bureaus function?
Microfinance credit bureaus aggregate data submitted by member MFIs in a designated format and generate reports on the clients in a proprietary report format which enables easy and fast understanding of a borrower’s credit profile using microfinance industry-specific search match algorithms which work well even with lower data availability. The microfinance credit bureaus accept input data through multiple methods (all secure and encrypted) and enable MFIs to offer weekly data updates for swift information availability. The credit bureaus have presented highly adaptable and customizable technology platforms which have enabled most MFIs to contributed data in the required formats without much difficulty. The microfinance SelfRegulatory Organization, MFIN requires as part of its Code of Conduct that a member MFI has to disburse the loan to its client within 15 days of performing the credit bureau check, failing which another credit bureau check will have to be undertaken to ensure that the credit decision is based on the most recent data. This has enhanced effectiveness of the credit bureaus. The microfinance credit bureaus generate customer client history by matching various data fields (such as the client name, client KYC ID number, client’s husband’s name, street address, village name, pin-code number, and various socio-economic identifiers), between different MFI’s records. The bureaus match the first 3 data fields to give a set of primary matches and 8 data fields to give a set of secondary matches. These matches are consolidated into a report which shows the different loans taken by an individual client, including details such as the MFI name, outstanding amount, whether repayment is on time or in default, etc. Due to the complexity of names in India, the names are matched phonetically so that irrespective of the spellings used, a client match 9
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Microfinance in India - Sector Overview - FY ‘14 can still be generated. Some clients may also try to evade discovery in the credit bureau by submitting different KYC documents (Voter ID card, Ration card, Aadhar card, etc.) to different MFIs. In such a case, client name and husband name may still give a primary match and if not, there would be a high chance of generating a secondary match from the other data fields captured. In this manner, the credit bureaus have generated over 100 million client records which have enabled MFIs to improve the quality of their lending decisions. Sometimes the data submitted to the credit bureau may be erroneous or submitted with a time lag, in which case an MFI may become a third lender to a borrower. In such a case, the MFI is required to report this to the Self-Regulatory Organization, MFIN, failing which a complaint can be filed against it by any of the other lenders to the client concerned. In cases where the credit bureau is showing an outstanding amount against a client who has actually settled her loan, the MFI to which the borrower has made a loan application may require the client to seek a No Objection Certificate from the concerned MFI (against whom an outstanding borrowing is reported) to indicate that the dues have been settled. Several MFIs reported collection of some amount of written off bad debts as the amounts showed as default in the credit bureau reports, prompting customers to settle the old dues. The portfolio quality of the MFIs has shown consistent improvement over the last few years, with portfolio at risk (PAR30) dropping from 2% to 0.4%, one of the reasons being availability of credit data of clients.
xv.
Why are repayment rates so high, when the borrower profile is so poor?
Since microfinance borrowers are very poor and do not have documentary proof of income or assets, they cannot get loans from formal financial providers. They can at best approach moneylenders, pawnbrokers or a variety of semi-formal financial service providers who would demand some form of collateral, usually land or gold jewellery. For this profile of borrowers, MFIs are unique in that they transact with them at their place of residence, charge lower rates of interest than informal providers, and do not seek collateral or documentation from them. Borrowers would therefore try to keep their relationship with these institutions intact by repaying their loans on time, so as to avail higher size loans, and a broader range of products and services as they graduate in their relationship with the MFI. Also, with the use of credit bureau for credit evaluation before every loan disbursement, the awareness of building and maintaining credit history for availing future loans has become important for the borrowers.
xvi.
Do MFIs also collect savings or offer other financial products?
In India, NBFC-MFIs are forbidden by the regulator from collecting savings or from offering in-house insurance products. However, they are permitted to offer insurance, and pension products by third-party entities legally mandated to undertake such businesses. Several MFIs in India have tied up with insurance companies to provide credit-life insurance to their borrowers. Similarly, several MFIs act as agents for the National Pension Scheme offered by Pension Fund Regulatory and Development Authority (PFRDA).
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xvii. What was the A.P. crisis?4 According to Microfinance State of the Sector 2011 report5, MFIs reached 31.4 million clients all over India in June 2011. The report mentions that in terms of “client outreach - borrowers with outstanding accounts” , there was growth of 17.6% MFI clients and 4.9% of SHG-Bank clients in the year 2010-11, highlighting that while both SHG and MFI models co-existed and flourished together, MFIs were growing at a much faster pace. In FY 11, the southern state of Andhra Pradesh had the highest concentration of microfinance operations with 17.31 million SHG members and 6.24 million MFI clients. The total microfinance loans in Andhra Pradesh including both SHGs and MFIs stood at Rs.157 billion with average loan outstanding per poor household at Rs. 62,527 which was the highest among all the states in India. This data implied that the state was highlypenetrated by microfinance (both MFIs and SHGs) giving rise to multiple borrowing. A CGAP study indicates that the average household debt in A.P. was Rs.65,000, compared to a national average of Rs.7,700. This high penetration of both SHGs and MFIs also led to stiff competition for client outreach between the stategovernment sponsored SHG program known as “Indira Kranthi Patham (Velugu)” and large, privately-owned MFIs resulting in wider conflict of interest. To arrest the growth of MFIs and to stem the alleged abusive practises adopted by MFIs, the state government promulgated an ordinance on October 16, 2010. In December 2010, the Ordinance was enacted into “The Andhra Pradesh Microfinance Institutions (Regulation of Money lending) Act, 2010”. The ordinance was claimed to be a result of a series of suicide incidents attributed to the alleged abusive practices of MFIs such as charging high interest rates, adopting coercive collection practises and lending aggressively beyond the repayment capacity of the borrowers. However, there was little more than anecdotal evidence to substantiate these claims. In many cases the coercive practices were being undertaken by local financiers and moneylenders who had started lending to borrower-groups privately, after seeing the success and good recovery rates of MFIs in the locality. As of January 2011, A.P. MFI repayment rates fell from 99% right before the issuance of the ordinance to less than 2% in rural areas and 0% in urban areas. The stringent regulations set by the state government (such as monthly repayments, all MFI branches to be registered with the government, no door to door collection of repayments etc.) coupled with active encouragement by the local politicians led to the fall in repayment levels. This, along with other reasons, led to what is commonly termed as “the A.P. crisis”. The crisis undermined the growth and indeed very existence of several MFIs having all their exposure or maximum exposure in Andhra Pradesh. Most of the MFIs who were severely affected under the A.P. crisis underwent Corporate Debt Restructuring in order to repay their obligations to banks. The crisis had an impact not only in the state of A.P. but also throughout India with many MFIs being unable to raise funds from banks (their prime source of debt funding) for up to two years after the crisis. It has been the biggest mass default in India since the inception of microfinance activities in the country and caused several small MFIs with only A.P. exposure to close down.
4
Parts of the answer show in italics largely sourced from Microsave-CMF joint publication “Andhra Pradesh MFI Crisis And Its Impact On Clients”, published in 2012 5 Access Assist, SAGE Publications
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xviii. What is the likelihood of another crisis similar to the “A.P. Crisis” occurring? There is very little likelihood of another crisis occurring since NBFC-MFIs (which form majority of the microfinance sector’s outstanding exposure) are now regulated by the RBI and are no longer the control of any state government. Also, there is very little risk of the circumstances which triggered the crisis in Andhra Pradesh recurring. Table 1: Factors for A.P. crisis and Preventive measures
Alleged factor for A.P. Crisis Multiple lending by MFIs Coercion of borrowers
Profiteering by MFIs
Unfavourable product design causing indebtedness to customers
xix.
Preventive Curbed by total microfinance outstanding per customer being capped at Rs. 50,000 and not more than 2 MFI providers Curbed by RBI guidelines for NBFC-MFIs and Fair Practice Code of RBI. Further backed by Microfinance Industry Association (Microfinance Institutions Network –MFIN) and Sa-Dhan’s Code of Conduct for MFIs in India Curbed by margin cap prescribed by RBI: Interest rates charged by an NBFC-MFI to its borrowers will be the lower of the following: The cost of funds plus 10% for large MFIs (Portfolio > Rs 100 crores) and cost of funds plus 12% for the others (Portfolio < Rs 100 crores), or The average base rate (as advised by RBI) of the five largest commercial banks by assets multiplied by 2.75. (Currently around 27.5%) This ensures that since the interest rate is capped, the only way in which an MFI can make more profits is to improve its own efficiency and lower its operating costs. Curbed by product features specified by RBI: Loan size: up to Rs 35,000 in 1st cycle; Rs 50,000 in subsequent cycles Tenure: not less than 24 months when loan amount >Rs 15,000 Repayment frequency: weekly/ fortnightly/ monthly at the borrower’s choice Moratorium: is not less than the frequency of repayment (or one installment)
Does microfinance really help poor people get out of poverty?
Microfinance is not a silver bullet which can eradicate poverty. It is essentially a tool to provide financial access to persons who have little or no access to formal financial providers. In most cases microfinance provides an alternative to informal sources of borrowing and in some cases acts as a replacement of a higher-cost debt and thereby enables borrowers or their families to earn more out of their existing business activities. Sometimes even loans used for consumption can have incremental positive effects on a borrower or her family - especially in the case of home improvement or payment of school fees. Such small incremental impacts over the long term can be meaningful for borrowers and may help them improve their incomes and asset holding. However, success of microfinance depends on several factors including the extent of entrepreneurship and business acumen of the end-user of the loan, no calamities or critical situations affecting the borrower or her family etc.
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xx.
Have MFIs achieved financial inclusion in backward districts?
India has close to 460 million people with no formal savings account and 650 million people without any formal source of borrowing. The progress towards financial inclusion has several positivity externalities, the most significant being poverty alleviation through generation of livelihood opportunities. As discussed in the CRISIL Inclusix Report, 2012, not only is the general level of financial services low in India, but there is substantial inter regional variation as depicted in the country-wise map of credit penetration levels, below: Figure 1: Credit Penetration as per CRISIL Inclusix Report 2012
Source: CRISIL Inclusix Report (2013)
Most states which show low financial inclusion also perform poorly in traditional poverty metrics. For e.g., eight states are home to 65% of India's poor and these eight states also show modicum progress on financial inclusion - Bihar, Madhya Pradesh, Orissa, Uttar Pradesh, Rajasthan, Jharkhand, Chhattisgarh and West Bengal.
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Microfinance in India - Sector Overview - FY ‘14 Figure 2: Poverty vs. Financial Inclusion as per CRISIL Inclusix score in select States 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0
43.3
39.9
37.0 32.1
28.8
33.7
32.6
31.7
33.1
35.2 29.4
31.4
34.8
25.5 20.0 14.7
Chhattisgarh
Jharkhand
Bihar
Odisha
Poverty (%)
Madhya Pradesh
Uttar Pradesh West Bengal
Rajasthan
CRISIL Inclusix Score
Source: Planning Commission poverty data and CRISIL Inclusix Report, 2013
MFIs have historically reached out to underserved populations, overcoming the barriers to financial access such as lack of collateral, transaction costs, lack of income proof and lack of formal credit history through innovative product design (use of group structure for social collateral), doorstep service (to overcome borrower transaction costs) and triangulation (local knowledge of group members) in addition to joint liability to ensure timely repayment. MFIs in India reach out to more than 30 million borrowers comprising the largest outreach to microfinance borrowers across the globe. However, when compared to the number of unbanked population, the outreach is miniscule. Infusion of growth capital could help MFIs substantially increase their outreach to more remote and backward areas, and this could in turn materially alter the level of financial inclusion in India. As can be seen from the table below, MFIs have considerable outreach across states with low credit penetration, accounting for ~ 40% of overall client outreach. Table 2: Credit Penetration by MFIs in select States
State West Bengal Uttar Pradesh Bihar Madhya Pradesh Odisha Rajasthan Jharkhand Chhattisgarh Total
No. of MFIs 12 15 17 21 11 14 10 8 th
Gross Portfolio (Rs. bn) 38.9 20.0 15.6 15.2 11.0 6.0 3.4 3.3 113.2
Clients (mn) 3.9 1.8 1.7 1.7 1.5 0.7 0.4 0.4 12.2
st
Source: MFIN MicroMeter, 9 May 2014 (Data as of 31 March 2014)
Identification of Backward Areas: There are several criteria which can be used to identify backward regions or districts – these include income levels, literacy levels, population lacking access to basic health services or sanitation, average land-holding size, dependency ratio, unemployment rate, etc. The UNDP’s Human Development Index (HDI), a composite statistic of life expectancy, education, and income indices has been used to identify levels of development/ backwardness at country level and has been used in India to rank states in a similar manner. However, it has not been applied across all 672 districts in the country. 14
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Microfinance in India - Sector Overview - FY ‘14 India’s poorest districts can be identified using a list of those districts which qualify for key government programmes specially targeted towards “backward areas”. Among these programmes, the Government of India’s Backward Districts Initiative – “Rashtriya Sam Vikas Yojana”, has a representative list, identified on the basis of an index of backwardness comprising three parameters with equal weights to each: (i) Value of output per agricultural worker (ii) Agriculture wage rate (iii) Percentage of scheduled caste/ scheduled tribe population in the district Another source for identification of backward regions is the Planning Commission of India’s list of 100 most backward districts in India. Under Planning Commission, the task force considered the following parameters as critical for selection of backward districts: (i) Incidence of poverty (number of families in the district below national poverty (ii) Education (school enrolment levels) (iii) Health (proximity to tertiary hospital) (iv) Water supply (number of households with supply of drinking water at the dwelling) (v) Transport and communications (vi) Degree of industrialization. Across both sources, IFMR Investments has derived a list of 148 unique backward districts which are mostly concentrated across the states which suffer from chronic backwardness and low levels of financial inclusion: Table 3: Backward districts identified by IFMR Investments
State West Bengal Uttar Pradesh Bihar Madhya Pradesh Odisha Rajasthan Jharkhand Chhattisgarh Other states
No. of backward districts 12 37 27 26 4 5 17 2 18
IFMR Investments’ Microfinance Debt Fund will actively seek to invest in MFIs that are expanding their outreach to areas with low level of financial inclusion including these backward districts.
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Microfinance in India - Sector Overview - FY ‘14
2. Overview of the Performance of the Microfinance Sector in India As discussed in the earlier section, the microfinance sector in India comprises several forms of institutions, including NBFC-MFIs (regulated by the Reserve Bank of India), Section 25 (not for profit) Companies and Trusts, Societies and Cooperatives. There are around 85 MFIs in India which regularly report to the Microfinance Information Exchange (MIX), a business information provider for the global microfinance sector. Of these MFIs, 46 NBFCs/ NBFC-MFIs regularly report to the industry association, Microfinance Institutions Network (MFIN) which has also been designated as the Self-Regulatory Organization for MFIs in India. These 46 institutions account for around 85% of the total microfinance portfolio in India6. The data presented in the following sections is primarily for these 46 institutions as these will form a sizeable chunk of the potential investee institutions being considered by IFMR Investments.
i.
Growth in the microfinance sector
The microfinance sector has grown consistently since the drop in portfolio in March 2012 following the A.P. crisis. Client numbers have now touched 28 million for NBFC-MFIs alone and outstanding loan portfolio has crossed Rs. 279 billion. This represents historically the highest point in the industry’s growth. Figure 3: Borrowers and portfolio outstanding of MFIs in India across years 300
279.3 28.0
27.6
27.0 250
30 25
216.0
23.0 200
183.0
150
14.0
22.7
23.3 207.3 20
173.8
15 117.0
100
10 60.0
50
5
0
0 FY 08
FY 09
FY 10
FY 11
Portfolio (Rs bn)
FY 12
FY 13
FY 14
Clients (mn)
Source: MIXMarket data till FY 11, MFIN Micrometer data FY 12-FY 14: only includes NBFCs and NBFC-MFIs for FY 12-14
6
MFIN’s Micrometer report analysis presented in the following sections is based on data collected from its 46 MFIN member institutions (32 have received the NBFC-MFI license from RBI and others are have applied for the license and are awaiting approval).
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Microfinance in India - Sector Overview - FY ‘14 NBFC-MFIs have shown an increase in Gross Loan Portfolio to the tune of 51% (non-Andhra Pradesh MFIs), indicating a rebound of the business to pre- A.P. crisis levels and renewed confidence of lenders to the sector. Including the Andhra Pradesh MFIs (which are currently under Corporate Debt Restructuring), the growth levels were still good at 35%. 80% of MFIN’s reporting MFIs showed positive growth between FY 13 and FY 14. Borrower numbers grew by 20% over the same period, signifying greater outreach and financial inclusion especially in the regulatory environment where no client can avail more than 2 MFI loans simultaneously. Loan disbursements increased by 48% for all MFIs, and 56% for non-Andhra Pradesh MFIs, signifying larger loan sizes disbursed to clients and a vibrant comeback for the sector. Total number of loans also grew by 31% in FY 14 compared to FY 13. As can be seen from the table below, each quarter’s performance in FY 14 was significantly better than the corresponding quarter in FY 13. Table 4: Loan Disbursements by MFIs (quarterly, Rs. Bn)
Jun'12 Sep'12 Dec'12 Mar'13 41.6 51.2 61.9 83.6 Increase over corresponding quarter in FY13
Jun'13 65.0 56.4%
Sep'13 76.6 49.7%
Dec'13 92.8 49.9%
Mar-14 115.2 37.8%
Source: Compiled from Micrometer quarterly reports
ii.
Portfolio Quality
Portfolio quality is measured using Portfolio at Risk (30 days) which signifies entire outstanding on any loans having a repayment delay for 30 days or more. This is the benchmark used for measuring default risk in an MFI, as assets are uncollateralized and a more conservative approach to credit and default risk is desirable. As can be seen from the graph below, performance of the sector has been getting consistently stronger in terms of reduction of PAR. Not all PAR becomes non-performing, some of it is recovered during the original tenure of the loan or with a slight delay. Figure 4: PAR 30 ratio for Non-Andhra Pradesh NBFC-MFIs
2.5%
2.0%
2.0% 1.5%
1.0% 0.7%
1.0% 0.5%
0.4%
0.3%
Sep'13
Mar-14
0.0% Mar-12
Sep'12
Mar'13
Source: Compiled from Micrometer quarterly reports
Analysing PAR 90 and PAR 180 as well, it can be seen that the rates have dropped significantly lower year on year, reinforcing the improvement in portfolio quality and indicating that majority of the loans are recovered in the PAR 30-90 bucket, reducing the possibility of classification as non-performing assets or default.
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Figure 5: PAR performance across financial years for non-Andhra Pradesh MFIs FY 11-12
FY 12-13
FY 13-14
1.20% 1.00% 1.00%
1.00%
1.00%
0.80% 0.70%
0.60%
0.60%
0.60%
0.40% 0.30%
0.20%
0.20% 0.10%
0.00% PAR 30
PAR 90
PAR 180
Source: Compiled from Micrometer quarterly reports
iii.
Credit Bureau reporting
The submission of data to credit bureaus is being done on a regular basis by most MFIs, and number of records has increased commensurate with the increase in business size and number of transactions by the member MFIs. Most MFIs are submitting their records to both the operational credit bureaus - High Mark and Equifax, while some are also submitting to Experian, which is yet to begin full-fledged services. The RBI mandates that all NBFC-MFIs perform credit checks through at least one credit bureau before sanctioning a loan proposal and MFIN mandates that all member-MFIs meet this requirement, also acting as a redressal forum in case of noncompliance. It is noteworthy that the microfinance sector credit bureaus became fully operational within 2 years of their inception in India, which has been much quicker than mainstream credit bureaus. Figure 6: Number of Credit Bureau records created across financial years
200
150
150 100
55
70
50 0 Mar-12
Mar-13
Mar-14
Source: Venture Intelligence-MFIN Microfinance Roundtable, June 2014
Presence of the Credit Bureaus has also played a role in reducing the incidence of delays and defaults as customers are aware that a bad credit history can impact their access to future loans across MFIs. The Credit Bureaus have even resulted in recovery of old loan write offs as defaulters were refused loans from all potential new lenders until they paid back their old dues. 18
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iv.
Productivity
A key requirement of the NBFC-MFI guidelines is that interest rates charged by an NBFC-MFI to its borrowers will be the lower of the following: The cost of funds plus 10% for large MFIs (loans portfolios exceeding Rs.100 crore) and cost of funds plus 12 per cent for the others. [The interest cost will be calculated on average fortnightly balances of outstanding borrowings and interest income is to be calculated on average fortnightly balances of outstanding loan portfolio of qualifying assets.] OR The average base rate of the five largest commercial banks by assets multiplied by 2.75. The average of the base rates of the five largest commercial banks advised by the RBI for the quarter AprilJune 2014 was 10.09%, resulting in a maximum interest rate of 27.75%. Subsequent to these developments, MFIs have made far-reaching efforts to improve productivity as they have only a 10-12% spread to cover operating and loan loss provisioning costs. Measures taken have included: Closure or merging of low-productivity branches Consolidation of centres with less than optimum membership to increase staff efficiency in collections Higher productivity targets for staff and increase in threshold caseload for incentive eligibility Retrenchment and redeployment of staff Shift to from weekly to fortnightly or monthly collection frequencies Revival of dropped out clients, efforts to retain existing clients Use of technology to lower time and expense involved in data collection, cash collections and data entry Reduction of loan turnaround times The results of these productivity enhancing measures can be seen from the results for NBFC-MFIs, below: Figure 7: Average Loan Outstanding per Client across financial years
FY 11-12
FY 12-13
FY 13-14
12,000 10,000 9,961
8,000
10,048
9,805
8,895
8,554
8,076
7,645
6,000 5,779
6,283
9,049 7,951
6,193
4,000 2,000 0 Total (all MFIs)
MFIs (glp < Rs 1 bn)
MFIs (glp > Rs 1-5 bn)
MFIs (glp > Rs 5 bn)
Source: Compiled from Micrometer quarterly reports
Across MFIs, irrespective of size there has been an increase in the loan outstanding per customer, reflecting a higher availability of funds with the MFIs to fulfil customers’ loan demands. On an average loan sizes increased 19
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Microfinance in India - Sector Overview - FY ‘14 by 12% for all MFIs, with the smaller MFIs increasing the average to a higher extent (29% in FY 14 over FY 13) than the largest MFIs (11% for the same period). Figure 8: Amount Disbursed per loan account (Rs) across financial years FY 11-12
FY 12-13
FY 13-14
16,000 14,000 12,000 10,000
15,134
14,343 11,872
14,275
13,482
12,916
12,757
11,676
11,497
11,964
12,717
10,497
8,000 6,000 4,000 2,000 0 Total (all MFIs)
MFIs (glp < Rs 1 bn)
MFIs (glp > Rs 1-5 bn)
MFIs (glp > Rs 5 bn)
Source: Compiled from Micrometer quarterly reports
On an average, there has been an increase of 12% in loan amounts disbursed per customer account between FY 14 and FY 13 – the average amount of loan disbursed increased in relatively the same proportion across MFIs irrespective of their size. Figure 9: Gross Loan Portfolio and Number of Clients per Branch across financial years
3,500
35 2,867
3,000 2,500
2,560
2,326
25 28.6
2,000 1,500
30
22.8
20 15
17.8
1,000
10
500
5
0
0 FY 11-12
FY 12-13 GLP per branch (Rs mn)
FY 13-14 Clients per branch
Source: Compiled from Micrometer quarterly reports
Number of clients per branch has increased overall by 12%, with the medium and larger MFIs contributing more to the increase in clients. Gross Loan Portfolio per branch has increased overall by 25%, reinforcing the increasing trends seen in disbursements and loan outstanding per client.
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Microfinance in India - Sector Overview - FY ‘14 Figure 10: Gross Loan Portfolio and Clients per Loan Officer across financial years 700 600
7.0
632
578
6.0
499 500 5.1
400 300
5.0
6.3
4.0
3.8
3.0
200
2.0
100
1.0
-
0.0 FY 11-12
FY 12-13 GLP per LO (Rs mn)
FY 13-14 Clients per LO
Source: Compiled from Micrometer quarterly reports
Productivity in terms of clients per Loan Officer (MFI Field staff) increased by 9% across NBFC-MFIs while the quantum of portfolio handled by each Loan Officer increased by 12% across NBFC-MFIs, commensurate with the increased loan disbursement and loan outstanding per client seen in earlier graphs.
v.
Flow of funds
Debt funding has flowed to the sector substantially compared to the previous two FYs as can be seen from the figure below – funding grew 49% in FY 14 over FY 13. Though the funding by non-banks has gone up in absolute terms, MFIs are still highly dependent on banks for their debt funding. Figure 11: Flow of Debt funds to the microfinance sector (Rs bn.) across financial years 150 30.1 100 50
17.0 120.2
9.5
83.7
47.0 0 FY12
Banks
FY13 Financial Institutions
FY14
Source: MFIN Micrometer, March 2014 data
The seasonal nature of bank funding can be seen from the table below, where there is hardly any flow of funds in the first 3 quarters and massive disbursements in the 4th quarter. As bank funding forms ~80% of MFI’s overall funding, this severely skews an MFI’s ability to maintain a steady disbursement pattern to its clients.
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Table 5: Pattern of Debt Funding flow to NBFC-MFIs across financial quarters
Total Debt Funding (Rs bn.) Banks (Rs bn.) Financial Institutions (Rs bn.) Proportion of bank funding Proportion of the year’s funding
FY12 56.5 47.0 9.5 83%
FY13 100.7 83.7 17.0 83%
1QFY14 10.0 7.9 2.1 79% 4%
2QFY14 38.1 32.5 5.4 85% 16%
3QFY14 34.5 28.2 6.0 82% 15%
FY14 150.3 120.2 30.1 80% 65%
Source: Compiled from Micrometer quarterly reports
Funding flowed to the sector substantially in FY 14, with volume of borrowings outstanding increasing by 31% over the previous FY; debt funding during the year increasing by 49% across all MFIs over the previous FY and securitization volumes increasing across all MFIs by 54%. It is interesting to note that these increases were experienced across MFIs with a higher increase in volumes of debt extended and securitization transacted for the medium sized MFIs (Gross Loan Portfolio Rs 1-5 bn.), signalling a more egalitarian approach by lenders, and renewed confidence in the microfinance sector across institutional size and scale. This is in stark contrast to the previous FY when only the largest non-Andhra Pradesh MFIs were able to raise debt funding, and this too, in a very limited quantum. Figure 12: Outstanding Borrowing, Total Funding and Securitization transactions across FYs for all NBFC-MFIs 250
222.24
200 150
169.29
150.3
130.36 101.15
100
58.83
51.46
33.38
26.27
50 0 FY 11-12
FY 12-13
FY 13-14
O/s borrowing at FY end (Rs bn)
Total funding during FY (Rs bn)
Securitization during FY (Rs bn)
Source: Compiled from Micrometer quarterly reports
Among the debt funding extended to the NBFC-MFIs, one of the most important sources has been NonConvertible Debentures or NCDs. The trends in NCD issuance are shown in the following graph. Figure 13: Trends in NCD Issuance (Rs bn.) across financial years 8.0
5.76
6.0 4.0 2.0
1.5
1.9
2.2
FY11
FY12
FY13
0.0 Source: BSE & NSE data
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Microfinance in India - Sector Overview - FY ‘14 Despite an increase in volumes of funding, the overall debt extended through this instrument still comprises a very low proportion of overall funding requirements of MFIs. Figure 14: Secured and Subordinated NCDs issued across financial years by NBFC-MFIs 0.1%
4.0% 0.0%
3.5% 3.0% 2.5%
0.1%
2.0%
3.8%
3.4%
1.5% 1.0%
2.0%
0.5% 0.0% FY12
FY13 Sub-Debt NCDs
Secured NCDs
FY14
Source: BSE & NSE data
The split between secured and subordinated NCDs indicates that there is still conservatism on the part of funders and that only a negligible proportion of funding comprises subordinated debt, although this is a key requirement for growth and scale. Only one MFI was able to raise subordinated debt through NCD issuance, despite a high requirement for this type of funding. Figure 15: NCD Funding to MFIs distributed by portfolio size, across financial years 2.50
2.1
2.00 1.50
1.7 1.4
1.3 0.9
1.00
0.4
0.50 0.0
0.0
0.2
0.00 > 1bn
500mn - 1bn
200mn - 500mn FY13
100mn - 200mn
50mn - 100mn
FY14
Source: BSE & NSE data
The above figure on distribution of NCD issuances across MFIs by portfolio size, indicates that it is only the larger institutions which have managed to raise the lion’s share of funding through NCD issuances.
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Microfinance in India - Sector Overview - FY ‘14 Figure 16: Average NCD tenure (in years)
6.0
5.0
5.0
4.3 3.5
4.0 3.0
2.0
1.6
2.0 1.0 0.0 > 1bn
500mn - 1bn
200mn - 500mn
100mn - 200mn
50mn - 100mn
Average NCD Tenure (In Yrs) Source: BSE & NSE data
The figure above indicates that NCD tenure across MFIs in terms of portfolio size is in favour of the largest institutions in the country, again reinforcing the bias towards larger sized MFIs. Aside from debt funding, equity deals also indicated renewed confidence of investors in the microfinance sector as Janalakshmi and Equitas concluded sizable equity raises of Rs. 3,500 million and Rs. 2,160 million respectively and Annapurna finished the year with a Rs. 300 million equity close. Figure 17: Equity Deals in FY 13 and FY 14 4500 4000 Janalakshmi
3500
3500
3000 2500 Equitas 2160
2000 Equitas
1500
1400
Janalakshmi 1000 SKS
800
500
587 250 Saija 130
0 Apr-12
Sonata450
Annapurna Jul-12
350
Grameen Koota 532 410 Satin
Ujjivan 70 Suryoday
Oct-12
200
200
250 Utkarsh Fusion Jan-13 May-13 Month and Year of deal
Source: Compiled from VC Circle reports
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Annapurna
Arohan
300
220
Aug-13
Nov-13
Mar-14
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Microfinance in India - Sector Overview - FY ‘14
vi.
Tier wise break up of performance metrics
Table 6: Tier wise performance metrics of NBFC-MFIs
Portfolio size Rs bn. Avg. GLP (Rs. mn.) Avg. Clients Loan amount disbursed annually (Rs. mn.) Loans disbursed annually (No.) Branches Employees Amount outstanding per client (Rs) Amount disbursed per loan (Rs) GLP per branch (Rs. mn.) GLP per employee (Rs. mn.)
1.0 25,748 2,616,833 35,345 2,283,395 716 5,883 11,011 16,474 55.7 4.6
0.5-1.0 7,136 534,546 11,153 1,193,012 202 1,843 13,568 10,685 36.9 4.0
0.2-0.5 2,708 261,544 3,277 197,669 114 818 10,722 16,767 28.1 3.7
0.1-0.2 1,495 153,166 1,620 108,621 60 372 10,310 14,872 26.5 4.5
