The microcredit sector has grown 16 times in the last 10 years, providing that service to the low-income segment who cannot get loans from banks in the usual way, such as small traders.
According to a report published by the Microfinance Institutions Network (MFIN):
India’s microcredit sector has grown tremendously over the past decade.
As of last March, the value of the sector is Rs 2,85,441 crore. This was Rs 17,264 crore in March 2012. Compared to that, the sector has now seen a growth of 16.5 times.
Banks and non-banks started providing microloans in 2016. Small banks joined this line in 2017.
MFIN was formed in 2010 to regulate the sector. Due to the activities of that organization, the microcredit sector is growing rapidly.
Currently there are 6 crore customers in this sector. As of March 2022, about 202 companies are providing microcredit services to them.
Banks play a major role in microcredit sector. The share of banks in total disbursed micro loans is Rs.1,14,051 crore. This is 40 percent of the total microcredit outstanding.
Next to banks, non-bank microcredit institutions disbursed microloans to the tune of Rs 1,00,407 crore. This is 35.2 percent of the overall market. Next to that, small banks provided small loans to the tune of Rs 48,314 crore (16.9 per cent). Non-banking institutions account for 6.9 percent and microcredit institutions account for 1 percent of the market, the report said.