Bihar has overtaken Tamil Nadu to claim the title of the state with the highest microlending borrowings in India, as per a report released by credit information company Crif High Mark. The report highlights Bihar’s impressive growth, showcasing a 13.5 percent increase in the gross lending portfolio during the March quarter compared to the previous quarter. As of March 2023, Bihar’s microfinance (MFI) borrowings reached Rs 48,900 crore, accounting for 14.5 percent of the total portfolio. This notable shift in rankings signifies Bihar’s growing significance in the microfinance sector.
The overall MFI portfolio outstanding exhibited substantial growth nationwide, reaching Rs 3.37 lakh crore by the end of March, reflecting a significant 17.9 percent increase. The report also points out an improvement in asset quality, as the proportion of MFI loans overdue for over 90 days decreased to 1.1 percent in March 2023, down from 2 percent in December 2022.
Among the top ten states, collectively constituting 85 percent of the outstanding portfolio, Bihar’s rise to the top was accompanied by Uttar Pradesh, Karnataka, West Bengal, Maharashtra, Madhya Pradesh, Odisha, Rajasthan, and Kerala. These states have experienced substantial growth in microfinance borrowings, contributing to the overall strength of the sector.
The report further reveals that the average exposure per borrower in Bihar stands at Rs 27,200, slightly higher than Tamil Nadu’s Rs 26,600. Additionally, the eastern region of India dominates the MFI landscape, representing one-third of the outstanding portfolio.
Dedicated non-banking finance companies, in the form of microfinance institutions, continue to hold the largest market share at 37.3 percent of the overall MFI loans. Banks closely follow at 33.1 percent, while small finance banks account for 16.6 percent of the market.
Notable Bihar Figures:
- Chief Minister: Nitish Kumar
- Governor: Rajendra Arlekar
- Capital: Patna