Key Points
New Delhi [India], October 21 (ANI): The microfinance sector (MFI) is expected to remain under distress for the entire current financial year, according to a recent report by Motilal Oswal...
The report highlighted that the sector is unlikely to recover soon, with signs of improvement likely to appear only at the beginning of the next fiscal year...
In our view, the stress in the current cycle will last for the whole of the current financial year, with the sector beginning to exhibit signs of normalization only at the onset of the next fiscal year said the report...
The report noted that this stress has led both regulators and the Self-Regulatory Organization (SRO) to intervene, pushing the Microfinance Institutions Network (MFIN) to introduce guidelines aimed at bringing discipline to MFI lending and preventing further deterioration...
Despite these efforts, the report warned that the stress in the sector is likely to affect growth in assets under management (AUM) and negatively impact profitability.. this surge in sectoral stress is expected to moderate the industrys assets under management (AUM) growth and substantially affect overall industry profitability the report added...
