Micro-loan disbursements increase by 14% – Newspaper

KARACHI: Microfinance loan disbursement increased by 13.7% in April-June on a quarterly basis after stagnating in the previous three months.

Micro-loan disbursements in the second quarter of 2022 totaled Rs 153.1 billion, compared to Rs 134.7 billion in the first quarter of 2021, according to the latest data released by the Pakistan Microfinance Network (PMN). However, the increase was 38.5% on an annual basis.

According to the comments of PMN analysts, despite the political and economic uncertainty, the microfinance sector has shown resilience as the majority of indicators have recorded growth.

The double-digit increase in disbursements was accompanied by a 7.5% increase in the Gross Loan Portfolio (GLP), which stood at Rs 448.6 billion. Loan disbursements are new credit issued during the three-month period, while GLP accounts for all outstanding principal owed by existing customers. The GLP increased by 26% on an annual basis.

Mobilink Microfinance Bank remains at the top of the list of active borrowers

Mobilink Microfinance Bank remained at the top of the list of active borrowers, followed by Khushhali Microfinance Bank, Akhuwat Islamic Microfinance and ASA Microfinance bank. The portfolio of microfinance banks was Rs 340 billion while that of non-banking microfinance companies remained at Rs 108 billion.

The number of active borrowers of microfinance banks was 5.4 million while that of non-banking microfinance companies was 3 million. Khushhali Microfinance Bank is the largest microcredit provider among microfinance banks, followed by HBL Microfinance Bank, Mobilink Microfinance Bank and U Bank.

Akhuwat Islamic Microfinance is the largest contributor to the gross loan portfolio of non-bank microfinance companies, followed by the National Rural Support Program and the Kashf Foundation.

The microfinance sector disbursed 5.4 million loans during the three-month period under review, up 3% from the previous quarter.

There were 8.4 million active borrowers at the end of April-June, up 3.5% from the number of borrowers at the end of the previous quarter. The average loan amount in April-June increased by 10.3% to 28,270 rupees from 25,629 rupees in the previous quarter.

The State Bank of Pakistan has now allowed microfinance banks to provide small business loans of up to Rs 3 million. This should translate into an increase in quarterly disbursements and overall average loan size. Unlike in the past, microfinance banks now actively finance tractors and other utility vehicles and provide long-term loans for affordable housing.

The ratio of anticipated delinquencies — loans overdue by more than 30 days — deteriorated slightly, from 4.3% at the end of March to 4.5% at the end of June.

As for micro-savings, the number of active savers remained at 86.7 million, up 2.9% on a quarterly basis.

The value of savings stood at 391.1 billion rupees at the end of June, down 8.9% from the previous quarter.

The microfinance penetration rate – which shows the share of the population concerned that has used microfinance products at least once in their life – was 41.3% at the end of June against 40% a quarter ago. This means that six out of ten potential clients in the country still do not have access to microfinance.

Posted in Dawn, October 9, 2022

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