Evolution of Microfinance

The Industry continues to survive shocks, self-regulate and strengthen its inherently fragile business model
What changed since the AP crisis? What will change in 2017+ ?
• Lending rates have dropped >10% on • Increased share of digital disbursements
average • Widening of credit bureau coverage
• Interest rates soften globally, disbursement • Robust and Digital Credit Risk Management
costs have come down - maintaining spreads • Lower long term Operating Costs
and operating margins
• Improved risk and regulatory framework

Pre- 2011 to
2017+

1 2 3
2010 2016

AP Crisis: Collections fell Demonetization Shock: Budget Triggers: Doubling

10-15%; disbursements Collections fell 5-10%; of farmer income as a
freeze disbursements drop – goal, good monsoon,
freeze in states like UP for financial inclusion
certain players

Source: timedimpulse.wordpress.com