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Microfinance - Improving Landscape For The Sector: Motilal Oswal

Microfinance - Improving Landscape For The Sector: Motilal Oswal

<div class="paragraphs"><p>Two people exchanging Indian two hundred rupee banknote. (Photo: Usha Kunji/BQ Prime)</p></div>
Two people exchanging Indian two hundred rupee banknote. (Photo: Usha Kunji/BQ Prime)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

CRISIL Ratings hosted a webinar to discuss the improving landscape for the Microfinance sector and the outlook ahead. The discussion revolved around a range of topics, including:

  1. historical challenges faced and the bounce back of the sector,

  2. recent Reserve Bank of India regulations,

  3. improving asset quality, and

  4. increasing use of technology and data analytics.

Here are the key takeaways:

  • The microfinance landscape has started to stabilise after going through several challenges over the past few years, with the pandemic being the most recent one. Some of the recent headwinds were the Andhra Pradesh crisis, floods in specific pockets, demonetisation, and the Covid-19 pandemic.

  • The pandemic was the most challenging one as it significantly affected the income-earning and cash flow generation ability of the borrower, and thus impacted asset quality.

  • Adequate capitalisation and sufficient provision buffer have helped NBFC micro finance institutions to tide over the crisis. The uninterrupted funding by banks and government (through several schemes) has also helped players during the current crisis.

Click on the attachment to read the full report:

Motilal Oswal Microfinance Sector Update.pdf

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