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The Hindu
3 days ago
- Business
- The Hindu
Tamil Nadu sees drop in microfinance gross loan portfolio in fiscal 2025
The Gross Loan Portfolio (GLP) of the microfinance industry in Tamil Nadu has declined in fiscal 2025, influenced by anticipated ordinances and increased regulatory intervention on collection practices, according to CRIF High Mark, a credit bureau. According to data from CRIF, the GLP in Tamil Nadu declined by 19.6% to ₹46,800 crore in fiscal 2025, from ₹58,200 crore in fiscal 2024. On a quarter-on-quarter basis, the GLP fell 7.7%, from ₹50,700 crore. Tamil Nadu (-7.7%, quarter-on-quarter basis), followed by Karnataka (-7.0% quarter-on-quarter basis), recorded steep GLP decline. State-level data revealed notable contractions in Tamil Nadu and Karnataka portfolios, influenced by anticipated ordinances and increased regulatory intervention on collection practices, the credit bureau said. Overall, the microfinance industry's GLP stood at ₹381.2K crore as of March 2025, marking a 2.6% decline quarter-on-quarter and a 13.9% drop year-on-year. The Tamil Nadu government has proposed to come out with a legislation aimed at fair collection and recovery practices, signalling further regulatory shifts in the sector, the further impact of which is yet to be seen, CRIF said. In April 2025, the Tamil Nadu Legislative Assembly passed the Tamil Nadu Money Lending (Prevention of Coercive Actions) Act, 2025. The Bill aims to protect and relieve the economically weaker and vulnerable groups and individuals from the undue hardship of coercive means of recovery of any loans by money-lending lending entities, such as microfinance institutions, money-lending agencies, and money-lending organisations. 'The fall in the gross loan portfolio was in line with the national trend. There were numerous factors involved, including the elections, impact of heatwaves and cyclones in some parts, and also over-leverage by borrowers in certain pockets affecting recoveries,' according to Jiji Mammen, executive director and CEO of Sa-Dhan, a self-regulatory organisation for the microfinance industry. The proposed Tamil Nadu legislation clearly excludes regulated entities. He claimed that with the passing of the Bill, some people in certain pockets have tried to take advantage of it by refusing to pay; however, overall, business has remained normal. Sa-Dhan has made a representation to the State government regarding the inclusion of all types of lenders under the 'coercive' clause in the Bill, which can get misrepresented. 'We have sought suitable amendments when the rules are framed to exclude regulated entities from the coercive clause,' he added. Aditi Singh, chief strategy officer, Satin Credit Network Ltd, which has a portfolio of ₹227 crore in Tamil Nadu, said during the initial discussions around the Bill, 'we took a cautious approach by slowing down disbursements in Tamil Nadu to evaluate the on-ground situation. However, after assessing the situation and seeing there is normalcy at the ground level, we gradually resumed business operations.'
Indian Express
26-05-2025
- Business
- Indian Express
Microfinance loan delinquencies jump 163% to Rs 43,000 crore in FY2025
The microfinance sector in India is experiencing a significant surge in delinquencies, with portfolio at risk (PAR), or loans overdue for over 31 days, jumping by 163 per cent to Rs 43,075 crore in the fiscal year ended March 2025, up from Rs 16,379 crore in the previous year. This rise in delinquencies reflects the growing stress in the small borrower segment. Significantly, the microfinance industry's gross loan portfolio (GLP) fell to Rs 381,200 crore as of March 2025, marking a 13.9 per cent fall from Rs 442,700 crore a year ago. Data from CRIF High Mark, a credit information bureau, shows that PAR in the 31-180 days overdue bucket has gone up to 6.2 per cent during FY2025 as against 2.1 per cent in the same period of last year. PAR in the 180 days plus bucket has jumped from 1.6 per cent to 5.1 per cent during the fiscal. 'PAR of 91-180 days and 180 plus days (including write-offs) continue to rise, particularly among banks and small finance banks, followed by NBFC-MFIs, highlighting persistent challenges,' the agency said. According to CRIF High Mark, higher-ticket loans above Rs one lakh have experienced an uptick in all delinquency buckets as their share in POS expands, highlighting the need for greater caution. However, its delinquency is much lower than the lower-ticket sizes, it said. Rating firm CRISIL said lending to over-leveraged borrowers was the primary factor that resulted in higher delinquencies for microfinance institutions in the last fiscal. Resultantly, the reported delinquencies in 90 plus DPD (days past due) bucket are estimated to have more than doubled to 6.0 per cent as on March 31, 2025, from 2.4 per cent as on March 31, 2024. Increased borrowing from multiple sources has led to excessive debt burdens among borrowers. Further, external economic shocks and income uncertainties have impacted repayment capacities, financial sector officials said. The decline in microfinance gross loan portfolio reflects a deliberate and calibrated shift by lenders to manage emerging stress, especially in light of regulatory developments and evolving collection practices. Despite a seasonal rebound with disbursements rising 12.2 per cent Q-o-Q to Rs 71,500 crore, the year-on-year (Y-o-Y) figures remain subdued with a 38.0 per cent decline, signifying an industry-wide emphasis on quality focused originations, according to CRIF High Mark, a credit information bureau in India. The gross loan portfolio declined by 2.6 per cent on a quarter-on-quarter basis. State-level data revealed notable contractions in Tamil Nadu and Karnataka portfolios, influenced by anticipated ordinances and increased regulatory intervention on collection practices. However, West Bengal emerged as a bright spot with a 1.5 per cent Q-o-Q rise in portfolio size, CRIF High Mark said. Overall, the industry-wide trend indicates consolidation, with a visible moderation in borrowers maintaining multiple credit relationships, it said. The number of active microfinance loans declined from 16.1 crore in March 2024 to 14.0 crore in March 2025. Borrowers with 5 or more lender associations now constitute only 4.9 per cent of the total book, down from 9.7 per cent a year ago, it said. 'A key trend highlighted in the report is the growing shift toward higher-ticket loans. Portfolio for loans above Rs 1 lakh grew by 38.5 per cent Y-o-Y, whereas those in the less than Rs 30,000 segment were at -8.0 per cent Q-o-Q and -35.9 per cent Y-o-Y, underlining a shift away from smaller-ticket lending typically associated with this segment,' CRIF High Mark said. Amid these shifts, the sector remains on a path of long-term sustainability. While current indicators suggest cautious lending and persistent stress in parts of the portfolio, improvement in early-stage performance and a gradual move towards higher-quality credit segments are encouraging trends, CRIF High Mark said. Ramkumar Gunasekaran, Director and Head of Sales at CRIF High Mark, said: 'Lenders are making conscious choices that favour resilience, stability and long-term impact. The 12.2 per cent Q-o-Q rise in disbursements to Rs 71,580 crore this quarter, despite broader moderation, reflects continued demand and a disciplined credit approach.' 'As institutions recalibrate and regulatory frameworks evolve, we are confident that the sector is laying the groundwork for stronger and more inclusive growth. With continued focus and collaboration, we remain hopeful that the coming quarters will bring renewed momentum,' he said. It said NBFC-MFIs experienced a relatively smaller decline in GLP this quarter, down 1.8 per cent QoQ, supported in part by increased originations during the JFM period. However, on a YoY basis, the contraction has been more pronounced, with GLP dropping by 18.2 per cent, accompanied by a moderate reduction in overall market share. Among other lender types, SFBs are also witnessing a significant contraction, declining by 5.4 per cent Q-o-Q and 19.9 per cent Y-o-Y.
Economic Times
26-05-2025
- Business
- Economic Times
Rise in long term delinquencies show persistent repayment challenges in microfinance
Representative Image Kolkata: Microfinance delinquencies in the early stage have moderated while those for the long term rose further, highlighting persistent industry-wide repayment challenges, credit bureau CRIF High Mark said after analysing the sectoral data. The credit bureau said that early delinquency, measured by portfolio at risk until 30 days past due (PAR 1-30) peaked to 2.1% at the end of September last year before improving to 1.4% by March, indicating a recent recovery in loan performance. However, longer-term delinquencies, particularly PAR 180+ continued to rise, highlighting persistent industry-wide repayment challenges and delinquency trends. PAR 91-180 rose to 3.4% at the end of March from 3.2% three months back while PAR 180+ rose to 5.1% from 3.7% for the same period. The PAR 180+ data is however only for loans disbursed in the last 24 months. This print also includes written off loans. The PAR 180+ print would be double of this if taken all past data beyond the last 24 months, people familiar with the matter said. Loans are classified as non-performing when they remain unpaid for more than 90 days. The PAR for 91-180 days past due and over 180 days past due (including write-offs) continue to rise, particularly for banks and small finance banks, followed by NBFC-MFIs, highlighting persistent challenges, CRIF High Mark said in its report on March-end data. Microfinance is a model of giving collateral-free loans to low-income households with annual income of less than Rs 3 lakh. Women are the primary beneficiaries of such loans. The microfinance market in Karnataka, which enacted a law to control the unregulated entities in February, saw stress levels soared with the sharpest jump in gross non-performing assets in the fourth quarter among all large states. Its portfolio at risk for 91-180 days past due bucket rose to 10.2% at the end of March from 4.5% three months prior to that. As Tamil Nadu is also in the process to regulate microfinance operations, the state's delinquency rate in the microfinance sector is anticipated to rise further as seen in the case of Karnataka."The Tamil Nadu government is also introducing a bill aimed at fair collection and recovery practices, signaling further regulatory shifts in the sector, the further impact of which is yet to be seen," CRIF High Mark said. Tamil Nadu saw a 7.7% quarter-on-quarter dip in gross loan portfolio while it was a 7% fall in Karnataka as lenders slowed disbursement anticipating trouble. Overall, the sector's gross loan portfolio got squeezed 14% year-on-year to Rs 3.81 lakh crore.
Time of India
26-05-2025
- Business
- Time of India
Rise in long term delinquencies show persistent repayment challenges in microfinance
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Kolkata: Microfinance delinquencies in the early stage have moderated while those for the long term rose further, highlighting persistent industry-wide repayment challenges, credit bureau CRIF High Mark said after analysing the sectoral credit bureau said that early delinquency, measured by portfolio at risk until 30 days past due (PAR 1-30) peaked to 2.1% at the end of September last year before improving to 1.4% by March, indicating a recent recovery in loan longer-term delinquencies, particularly PAR 180+ continued to rise, highlighting persistent industry-wide repayment challenges and delinquency 91-180 rose to 3.4% at the end of March from 3.2% three months back while PAR 180+ rose to 5.1% from 3.7% for the same period. The PAR 180+ data is however only for loans disbursed in the last 24 months. This print also includes written off loans. The PAR 180+ print would be double of this if taken all past data beyond the last 24 months, people familiar with the matter are classified as non-performing when they remain unpaid for more than 90 PAR for 91-180 days past due and over 180 days past due (including write-offs) continue to rise, particularly for banks and small finance banks, followed by NBFC-MFIs, highlighting persistent challenges, CRIF High Mark said in its report on March-end is a model of giving collateral-free loans to low-income households with annual income of less than Rs 3 lakh. Women are the primary beneficiaries of such microfinance market in Karnataka, which enacted a law to control the unregulated entities in February, saw stress levels soared with the sharpest jump in gross non-performing assets in the fourth quarter among all large states. Its portfolio at risk for 91-180 days past due bucket rose to 10.2% at the end of March from 4.5% three months prior to Tamil Nadu is also in the process to regulate microfinance operations, the state's delinquency rate in the microfinance sector is anticipated to rise further as seen in the case of Karnataka."The Tamil Nadu government is also introducing a bill aimed at fair collection and recovery practices, signaling further regulatory shifts in the sector, the further impact of which is yet to be seen," CRIF High Mark Nadu saw a 7.7% quarter-on-quarter dip in gross loan portfolio while it was a 7% fall in Karnataka as lenders slowed disbursement anticipating the sector's gross loan portfolio got squeezed 14% year-on-year to Rs 3.81 lakh crore.
Mint
06-05-2025
- Business
- Mint
Applying for an ICICI credit card? Here's the minimum credit score you'll need
ICICI Bank, offers a diverse and unique range of credit cards designed to meet various financial needs of credit card users. A pivotal factor in the entire process of approval of credit cards through ICICI Bank, is the applicant's credit score. Now, given there is no fixed credit score defined by ICICI Bank for availing credit facilities, still a credit score of over 750 is considered reasonable and safe for the approval of credit card applications. It is also important to keep in mind that apart from just a high credit score there are several other factors that are looked at while the bank decides on allowing a particular applicant's credit card or personal loan application. Factors such as credit worthiness, credit history, recent payment history, stability of employment along with other factors. All these factors cumulatively help the bank in taking a call with regards to individual credit card applications on a case to case basis. Prominent credit bureaus such as CRIF High Mark, Experian, Equifax and CIBIL generally provide scores in the range from 300 to 900. This score is a simple reflection of an individual's creditworthiness and integrity. A higher credit score indicates a pretty strong credit history, thus making lenders more confident and convinced in the borrowers ability to repay. For all ICICI Bank credit cards, a score above 750 is generally considered favourable. Still, those with scores between 650 and 749 might still be eligible depending on other factors such as income, existing debts and repayment history. Now, even if applicants with low credit scores are allowed credit cards by the ICICI Bank, still such cards will come at the expense of little challenging and strict terms and conditions. The ICICI Bank offers its credit card customers several unique credit cards. For example, for shopping (Amazon Pay), fuel (HPCL super saver), travel (MakeMyTrip) and premium users (Emeralde, Sapphiro). The bank also offers co-branded cards like the Manchester United credit card for football lovers. For more information and related terms and conditions on the above discussed credit cards refer to the official website of ICICI Bank and its dedicated customer support team. Beyond just credit score, ICICI Bank also checks through several other important factors: Total existing debt : A lower debt-to-income ratio signifies better financial management and makes the possibility of credit card and personal loan approval higher. : A lower debt-to-income ratio signifies better financial management and makes the possibility of credit card and personal loan approval higher. Repayment history : Sincere repayments on existing loans or credit card bills can positively influence approval chances. : Sincere repayments on existing loans or credit card bills can positively influence approval chances. Income level: A long job history for salaried individuals and a long tax filing history for self employed individuals assures the bank of the applicants repayment capacity. A long job history for salaried individuals and a long tax filing history for self employed individuals assures the bank of the applicants repayment capacity. Employment status: Salaried individuals with reputable companies or self employed individuals with consistent earnings are given preference by the lender. Applicants aiming to boost their credit score to ensure seamless approval of credit card applications should ensure: Payments on time: Be focused on ensuring all dues are paid on or before the due date. Be focused on ensuring all dues are paid on or before the due date. Credit utilisation ratio: Try to maintain a credit utilisation ratio below 30% of the total credit limit. Try to maintain a credit utilisation ratio below 30% of the total credit limit. Consistent monitoring and checking: Check your credit reports at regular intervals for discrepancies and inaccuracies. So that you can promptly get any errors rectified. To conclude, it can be stated that a credit score of 750 or above is generally favourable for ICICI Bank credit card applicants. The bank looks to adopt a holistic approach while considering various financial aspects and limitations of the credit card applicant. Maintaining responsible credit behavior, along with stable income and sensible financial habits boosts the chances of approval. Still, in your own interest as an applicant you should reach out to the official website of ICICI Bank, understand the terms and conditions applicable in your individual case. Post the same, discuss your problems and concerns with the designated customer service executive before taking the decision on applying for a credit card through ICICI Bank. Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit. First Published: 6 May 2025, 11:13 AM IST
