Indian Microfinance. Shifting focus of Indian MFIs from rural to urban. Rising level of indebtedness. Who is Indian MFI really serving to?

1. Who is Indian MFI serving to?
1
Debidutta Pattnaik, CFA (ICFAI)
PGDM, MBA, MIFA

2. 2
257.38
335.17
488.82
638.53
0
100
200
300
400
500
600
700
2013 2014 2015 2016
Billions
Portfolio O/s
Portfolio O/s
Source: Bharat
Microfinance Reports
for 2016,2015, 2014
Industry Size

3. 3
Decreasing rural clientele and
increasing indebtedness
8112
10079
13162
11425
0
2000
4000
6000
8000
10000
12000
14000
0
5
10
15
20
25
30
35
40
45
2013 2014 2015 2016
Millions
Client Outreach Rural Clients Avg. Loan Per Borrower
Source: Bharat Microfinance Report 2016, 2015, 2014

4. 4
69% 67%
56%
33%
38%
31% 33%
44%
67%
62%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2012 2013 2014 2015 2016
Rural Clients
Urban Clients
Source: Bharat
Microfinance Reports
for 2016,2015, 2014
Drifting Focus from
Rural to Urban

5. 5
7481 7725 8112
10079
13162
11425
0
2000
4000
6000
8000
10000
12000
14000
2011 2012 2013 2014 2015 2016
Average Loan
Average Loan
Source: Bharat
Microfinance Reports
for 2016
Loan Per Borrower

6. 6
15717
14124 13667
10992
10322
8762
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Average Loan Per
Borrower
National Average
Source: Bharat
Microfinance Reports
for 2016
Rising Level of
Indebtedness – A Zonal
Comparison

7. 7
The illogical balance
32%
25%
14%
13%
8%
8%
14%
31%
14%
13%
22%
36%
0% 10% 20% 30% 40%
South
East
North
West
North-east
Central
Avg. % of BPL Population
% of MFI Concentration
Source: Bharat
Microfinance Reports
for 2016 & RBI’s
Report on Poverty in
India

8. Are Indian MFIs really serving the poor?
8