Microfinance Sector Check - Gradually Approaching Normalcy: ICICI Securities
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ICICI Securities Report
Microfinance sector, after sailing through one of the most prolonged and uncertain asset quality cycles since 2010, is poised to approach normalcy by H2 FY22E , assuming no third-wave disturbance.
Calibrated growth since the Covid-19 onset, restricted to non-delinquent customers, and prudent recognition of the vulnerable pool would ensure quality growth going ahead.
Systemic asset under management grew 1%, but unique borrower base fell 6%, between March 2020-June 2021.
However, with an improving macroeconomic outlook, players have articulated their intention to accelerate new customer acquisition in H2 FY22e, which will balance out the increasing ticket size.
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