India Microfinance Market

June 2024 | 53 pages | ID: I0F0276B0F94EN
Evolve Business Intelligence

Abstracts

India Microfinance Market By Tenure (Less than 1 Year, 1-2 Years, More than 2 Years), By Purpose (Agriculture, Manufacturing/ Production, Trade & Services, Household, Others), By Provider Type (Banks, Microfinance Institute, Non-banking Financial Corporation, Others) – Covid-19 Impact Analysis, Post Covid Analysis, Opportunities, Trends And Forecast From 2021 t-2034

The India Microfinance market was valued at $34.66 Billion in 2023 and is anticipated t-grow at a CAGR of 12.58% from 2024 t-2034. This growth is attributed t-several macr-and microeconomic factors such as

• Lack of access t-credit and other financial services for low-income group population

In India, a significant portion of the population, particularly those in rural and semi-urban areas, remains underserved by traditional financial institutions. These low-income groups often d-not meet the stringent criteria set by conventional banks, such as having a steady income, collateral, or a strong credit history, making it challenging for them t-secure loans and access other financial services. Microfinance institutions (MFIs) bridge this gap by providing tailored financial products designed t-meet the needs of low-income individuals. By offering small loans, often without requiring collateral, microfinance empowers these groups t-engage in entrepreneurial activities, improve their livelihoods, and enhance their economic stability. This accessibility t-credit facilitates the growth of microenterprises, which are crucial for income generation and employment in underserved communities. Moreover, microfinance extends beyond mere credit provision; it includes savings accounts, insurance, and payment services, all crucial for financial inclusion. Access t-these services helps low-income individuals manage risks, save for future needs, and conduct financial transactions more efficiently. MFIs als-provide financial education and training, equipping clients with the knowledge and skills t-manage their finances better and make informed economic decisions. The increasing demand for microfinance in India reflects the substantial unmet need for financial services among low-income populations. This demand drives the expansion and development of the microfinance market, encouraging the entry of new players and the diversification of financial products. As a result, the microfinance sector becomes a key instrument in promoting financial inclusion, reducing poverty, and fostering economic development in India.

Further several factors restraining the market growth include

• High cost associated with Microfinance

The issue of lack of fundamental understanding of financial principles is prevalent among low-income groups wh-constitute the primary clientele for microfinance institutions (MFIs). Many individuals in these communities have limited education and lack exposure t-basic financial concepts, which hinders their ability t-effectively utilize financial products and services. This deficiency in financial literacy can manifest in several ways. Firstly, individuals may struggle t-comprehend the terms and conditions of microloans, leading t-misunderstandings about repayment schedules, interest rates, and penalties. Such misunderstandings can result in repayment defaults, over-indebtedness, and financial distress, undermining the very purpose of microfinance, which is t-foster economic stability and empowerment. Secondly, the inability t-manage finances effectively can impede the growth and sustainability of microenterprises. Entrepreneurs with limited financial knowledge might fail t-keep accurate records, budget appropriately, or reinvest profits wisely, stunting the potential growth of their businesses. This can lead t-a cycle where microenterprises remain small and vulnerable, unable t-achieve substantial economic progress or scalability. Additionally, a lack of financial understanding can discourage individuals from engaging with MFIs altogether. The perceived complexity of financial products can deter potential clients from seeking out microfinance services, thereby limiting the reach and impact of MFIs. This hesitation t-engage with formal financial services perpetuates reliance on informal and often exploitative lending practices, further entrenching poverty and financial exclusion. T-address this restraining factor, it is crucial for MFIs t-incorporate financial literacy programs int-their services. Providing education on basic financial principles, such as budgeting, saving, and responsible borrowing, can empower clients t-make informed decisions, improve financial management, and enhance the overall effectiveness of microfinance interventions. By bridging the gap in financial literacy, MFIs can ensure that their clients not only access financial services but als-use them t-achieve sustainable economic growth and stability.

The deployment of digital technologies and collaborations and alliances in the Microfinance market are expected t-generate higher avenues during the forecast period.

In the wake of the COVID-19 pandemic, supply chain disruptions have led t-supply shortages or lower demand in the Microfinance market. The pandemic has caused a decline in new orders and a corresponding decrease in Purposeion.

This section will analyze how COVID-19 has impacted supply chains, leading t-shortages and lower demand for Microfinance.

In terms of COVID-19 impact, the Microfinance market report als-includes the following data points:

• Impact on Microfinance market size
• Operating Weights Trend, Preferences, and Budget Impact
• Regulatory Framework/Outdoor Policies
• Key Players' Strategy t-Tackle Negative Impact/Post-COVID Strategies
• Opportunity in the Microfinance market

Key Insight in the report:

The India Microfinance market report covers an executive summary, market dynamics, COVID impact & post-COVID scenario, market size and forecast, competitive intelligence, market positioning, and Purposes.

Our report covers extensive competitive intelligence which includes the following data points:

• Business Overview
• Business Segment Data
• Financial Data
• Purpose Segment Analysis and Specification
• Recent Development and Company Strategy Analysis
• SWOT Analysis

Microfinance Market Segmentation:

• Tenure
• Less than 1 Year
• 1-2 Years
• More than 2 Years
• Purpose
• Agriculture
• Manufacturing/ Production
• Trade & Services
• Household
• Others
• Provider Type
• Banks
• Microfinance Institute
• Non-banking Financial Corporation
• Others

Key Players Analyzed in the Report:

• Bharat Financial Inclusion Limted
• CreditAccess Grameen Limited
• Utkarsh Small Finance Bank Limited
• Ujjivan Financial Services Limited
• Share Microfin Limited
• Spandana Sphoorty Financial Ltd
• Asmitha Microfin Ltd
• Muthoot Microfin Limited
• Bhartiya Samruddhi Finance Limited (BSFL)
• BSS Microfinance Limited

Contents

CHAPTER 1. EXECUTIVE SUMMARY

CHAPTER 2. SCOPE OF THE STUDY

2.1. Market Definition
2.2. Market Scope & Segmentation
  2.2.1. Objective of Report

CHAPTER 3. EVOLVE BI METHODOLOGY

3.1. Data Collection & Validation Approach
3.2. Market Size Estimation and Forecast

CHAPTER 4. MARKET INSIGHTS AND TRENDS

4.1. Value Chain Analysis
  4.1.1. Input Suppliers
  4.1.2. Microfinance Institutions
  4.1.3. Distribution Channel
  4.1.4. End-User
4.2. Porter’s Five Forces Analysis
  4.2.1. Bargaining Power of Buyers
  4.2.2. Bargaining Power of Suppliers
  4.2.3. Threat of New Entrant
  4.2.4. Threat of Substitute
  4.2.5. Industry Rivalry
4.3. COVID-19 Impact and Post COVID Scenario on Microfinance Market
  4.3.1. Impact of COVID-19
  4.3.2. Government Support and Industry Revival Policies
  4.3.3. Measures Taken by Companies to Mitigate Negative Impact
  4.3.4. Post COVID Trend

CHAPTER 5. MARKET DYNAMICS

5.1. Introduction
5.2. Drivers
  5.2.1. Low-income groups of people lack access to credit and other financial services
  5.2.2. Advancement in technology
5.3. Restraints
  5.3.1. Lack of fundamental understanding of financial principles
5.4. Opportunity
  5.4.1. Deployment of digital technologies in the microfinance industry
  5.4.2. Collaboration and cooperation in the microfinance industry

CHAPTER 6. INDIA MICROFINANCE MARKET, BY TENURE

6.1. Introduction
  6.1.1. Less than 1 Year
  6.1.2. 1-2 Years
  6.1.3. More than 2 Years

CHAPTER 7. INDIA MICROFINANCE MARKET, BY PURPOSE

7.1. Introduction
  7.1.1. Agriculture
  7.1.2. Manufacturing/ Production
  7.1.3. Trade & Services
  7.1.4. Household
  7.1.5. Others

CHAPTER 8. INDIA MICROFINANCE MARKET, BY PROVIDER TYPE

8.1. Introduction
  8.1.1. Banks
  8.1.2. Microfinance Institute
  8.1.3. Non-banking Financial Corporation
  8.1.4. Others

CHAPTER 9. COMPETITIVE LANDSCAPE

9.1. Competitior Benchmarking 2023
9.2. Market Share Analysis, 2023
9.3. Key Developments Analysis By Top 5 Companies
9.4. Market Share Acquisition Strategies: Analysis of Key Approaches Employed by Top Players

CHAPTER 10. COMPANY PROFILES

10.1. UJJIVAN FINANCIAL SERVICES LIMITED
  10.1.1. Business Overview
  10.1.2. Financial Analysis
    10.1.2.1. Business Segment Revenue, 2023
  10.1.3. Product Portfolio
  10.1.4. Recent Development and Strategies Adopted
  10.1.5. SWOT Analysis
10.2. Asmitha Microfin Ltd
  10.2.1. Business Overview
  10.2.2. Product Portfolio
10.3. Utkarsh Small Finance Bank Limited
  10.3.1. Business Overview
  10.3.2. Financial Analysis
    10.3.2.1. Business Segment Revenue, 2023
  10.3.3. Product Portfolio
  10.3.4. SWOT Analysis
10.4. CreditAccess Grameen Limited
  10.4.1. Business Overview
  10.4.2. Financial Analysis
  10.4.3. Product Portfolio
  10.4.4. Recent Development and Strategies Adopted
  10.4.5. SWOT Analysis
10.5. SHARE MICROFIN LIMITED
  10.5.1. Business Overview
  10.5.2. Product Portfolio
  10.5.3. SWOT Analysis
10.6. SPANDANA SPHOORTY FINANCIAL LTD
  10.6.1. Business Overview
  10.6.2. Financial Analysis
  10.6.3. Product Portfolio
10.7. Bhartiya Samruddhi Finance Limited (BSFL)
  10.7.1. Business Overview
  10.7.2. Product Portfolio
10.8. BHARAT FINANCIAL INCLUSION LIMITED
  10.8.1. Business Overview
  10.8.2. Financial Analysis
  10.8.3. Product Portfolio
  10.8.4. SWOT Analysis
10.9. BSS Microfinance Limited
  10.9.1. Business Overview
  10.9.2. Product Portfolio
10.10. Muthoot Microfin Limited
  10.10.1. Business Overview
  10.10.2. Financial Analysis
  10.10.3. Product Portfolio
  10.10.4. Recent Development and Strategies Adopted