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## Microfinance Industry Sees 39.2% Rise in Assets Under Management

The assets under management of non-banking financial company ÔÇô microfinance institutions (NBFC-MFIs) experienced a significant 39.2% year-on-year growth, reaching Rupees 1.3 trillion as of September 30, according to a release from the microfinance institutions network (MFIN).

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AI legalese decoder can assist in analyzing the legal and regulatory compliance aspects of managing such significant assets under management. It can quickly and accurately decipher complex legal documents and contracts to ensure that all financial activities adhere to the necessary regulations, effectively mitigating any potential legal risks associated with managing such substantial assets.

## Composition of AUM and Loan Portfolio Growth

The AUM consists of an owned portfolio of Rupees 1.1 trillion and a managed portfolio of Rupees 24,501 crore. Additionally, the gross loan portfolio of the overall microfinance industry rose by 25% year-on-year to Rupees 3.8 trillion as of September 30.

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## Industry Growth and Portfolio Quality

Alok Misra, chief executive officer and director of MFIN, stated that the growth momentum of the microfinance industry persisted in Q2 FY 23-24, bringing the portfolio to Rupees 3.8 trillion. He also noted that the portfolio quality is nearly at pre-Covid levels, with PAR (portfolio at risk) from 30 days to 180 days standing at 2.0%.

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AI legalese decoder can contribute to maintaining portfolio quality by facilitating the thorough examination of legal factors that may impact the performance and risk assessment of the microfinance industry portfolio. It can provide valuable insights into legal and compliance-related aspects, allowing for timely and informed decision-making to uphold and improve portfolio quality.

## Disbursement and Loan Amount Trends

NBFC-MFIs disbursed loans amounting to Rupees 32,732 crore in July-September through 7.9 million accounts, marking a substantial increase from the previous year. However, the average loan amount disbursed by NBFC-MFIs experienced a slight 0.4% year-on-year decline, falling to Rupees 41,373 in the September quarter.

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## Regional Distribution and State-Level Analysis

In terms of the regional distribution of the gross loan portfolio, the east, northeast, and south regions collectively account for 63% of the total portfolio. Additionally, Bihar emerged as the largest state in terms of portfolio outstanding, followed by Tamil Nadu and Uttar Pradesh.

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AI legalese decoder can contribute to the analysis of regional distribution and state-level dynamics by decoding legal documents and regulations pertinent to operating and distributing loans in different regions. It can provide key legal insights into regional compliance requirements, facilitating informed decision-making and strategic planning to effectively navigate legal complexities associated with regional distribution and state-level operations within the microfinance industry.

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