Weekly Current Affairs

MFIs see higher growth in urban India than rural: Report [Economy]

  • Over the last year, microfinance institutions (MFIs) have seen their business grow faster in urban India than in rural, according to an annual report by Sa-Dhan, the self-regulatory body for MFIs.
  • In addition, the report finds that these loans are being put to increasingly productive uses with a higher proportion of them going towards income generation than before.
  • In 2016, total loan amount disbursed increased by Rs.13,433 crore over 2015, there is a growth of 23 per cent where amount increased in rural areas by 14 per cent and in urban areas by 27 per cent.
  • In 2011, RBI regulation stipulated that a minimum of 70 per cent of the MFI loans are to be deployed for income generating activities.
  • Analysis of the loan portfolio held by reporting MFIs for 2014-15 and 2015-16 shows that the proportion of income generation loan to non income generation loan is 94:06.
  • Within the income-generating loans, the report found that the largest proportion—39 per cent—went to the animal husbandry sector, followed by 29 per cent to the trading & small business category.
  • Agriculture received 15 per cent of the loans.