Microfinance institutions (MFIs) would grow at an annual pace of 30 per cent to 35 per cent over the next three years on the back of improved fund availability, ratings agency ICRA said.
The market potential, according to ICRA's calculation, is Rs 1.4-Rs 2.5 lakh crore. However, the current size of the microfinance market, including microfinance institutions (MFIs) and those under self-help group-bank linkage programme, is just Rs 60,000 crore, said the media report.
According to industry associations, a typical loan size is Rs 10,000 and many borrow from two MFIs. This, however, is lower than the Rs 35,000-45,000 loans that many households are demanding, says ICRA.
It also expects asset quality of non-Andhra Pradesh MFIs to worsen a little more as they expand into newer geographies, lend to marginalised sections.
The overall microfinance market increased 14 per cent in 2012-13. MFIs however reported 26 per cent growth to Rs. 22000 crore for the period. SHG bank linkage programmes advanced 8 per cent to Rs. 39400 crore in 2012-13, ICRA said.
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