K’taka has 5th-highest share of microfinance borrowers: Report

Bengaluru: Karnataka stands fifth in the country in the share of clients who opt for microfinance lending. At 8.1%, the state is behind Bihar (at the top spot) followed by Tamil Nadu, Uttar Pradesh and West Bengal, according to ‘Microfinance in Karnataka’, a report compiled by Association of Karnataka Microfinance Institutions.
At the end of March 2022, the state had 9.4 million loan accounts covering 5.4 million unique clients, as per the report written by N Srinivasan, former chief general manager of National Bank for Agriculture and Rural Development (NABARD).
The impact study that he and his team conducted with 16,000 customers of the industry across Karnataka showed that 89% of them prefer microfinance institutions to other lenders. As part of this exercise, the team found that 90% of the loans taken from microfinance institutions were for income-generating purposes.
MFIs in Karnataka have a loan portfolio of Rs 46,000 crore outstanding as per the report. The average loanee from the state borrows Rs 44,036 from MFIs.
The districts of Mysuru, Belagavi, Tumakuru, Mandya and Hassan were on top in terms of the number of loan accounts held with MFIs. Koppal, Haveri, Chitradurga, Belagavi and Davanagere were ranked as the top five districts where MFI loans had a larger share in the per capita income figure.
The report found Karnataka held 91.8 lakh loans from MFIs and 13.2% of its population was dealing with microfinance credit.