Microfinance, a proven growth enabler for the conventionally less bankable, has had a remarkable two-decade journey of evolution in India, characterized by extraordinary discipline and resilience. It has grown strongly with manageable credit costs through the cycle, including in times of tepid growth and elevated loss levels. In the period FY17 to FY22, when average credit growth was in single digits, the microfinance industry grew at a CAGR of 24% with collection efficiency sustained at over 90%. On a portfolio size of over Rs.2.8trillion and serving over 55million unique customers (31 March 2022, Source: MFIN), this is a lead indicator for significant value creation. The adoption of technology is driving the next wave of product innovation and efficiency gains. SFIF’s investment approach in microfinance is to enable innovation while driving scale.
