The number of loans disbursed also saw an increase during the financial year 2021-22, indicting a continued growth of the microfinance portfolio, it added.
Alok Misra CEO and director of MFIN said that the MFI industry had shown good progress during the last quarter of 2021-22 as it built on the momentum created in the previous corresponding quarter.
He said the portfolio quality has improved significantly as compared to the end of the April-June quarter of the previous financial year when the second wave of COVID-19 had caused widespread stress across all parts of the country.
The industry body, however, said some deviations from the past trends had been observed during the last fiscal.
Firstly, the proportion of NBFC-MFI portfolio increased by 4.1 per cent to 35.2 per cent as on March 31,2022, though banks continue to be the main contributors.
According to the report, 12 banks hold the largest share of portfolio in microcredit with a total loan outstanding of Rs 1.14 lakh crore and NBFC-MFIs are the second highest provider of such credit with a loan outstanding amount of more than Rs one lakh crore.
Small finance banks (SFBs) have a total loan outstanding of Rs 48,314 crore with a total share of 16.9 per cent, while NBFCs with 6.9 per cent and other MFIs at one per cent, the report added.
VFS Capital managing director and CEO Kuldip Maity said the economic activities have returned to normalcy and there is a spurt in demand for MFI loans.
“Opportunity exists in the present era after two years of COVID and there is a scope to reach underbanked areas,” he added .