AKMI to host Microfinance Karnataka Summit 2023 in Bangalore
Bangalore, September 10, 2023: Association of Karnataka Microfinance Institutions (AKMi) is organizing “The Microfinance Karnataka Summit – 2023”, to highlight the growth of Microfinance Industry in Karnataka on Tuesday, the 12th of September. The impact study which has been turned into a book, ‘Microfinance in Karnataka – Sector Report 2023,’ by Mr. N. Srinivasan, former chief general manager, NABARD, will be unveiled by Dr. G. Parameshwara, Hon’ble Home Minister of Karnataka. He will also address leaders and experts of the Microfinance Industry.
The launch of the Impact Study report will be followed by panel discussions which will feature industry experts on the Growth, Innovation and Future Prospects of Microfinance in Karnataka. The survey has covered 7 districts in Karnataka with 2300 microfinance customers per district. The purpose of the survey was to understand the socio-economic impact of two and half decades of microfinance operations in Karnataka and also to better understand the needs of the customers.
“The Microfinance industry in Karnataka is estimated to have grown upwards at 10% during the year 2022-23 considering both Joint Liability Group (JLG) and Self-Help Group (SHG) loans, reaching to around 46,000 cr. making Karnataka one of the largest states in terms of portfolio size. AKMI’s role is to ensure customer protection, strengthen the ecosystem by building strong relationships with all stake holders and support members in connecting with stakeholders and addressing local level issues across the state,” said Mr. Venkatesh N, Chairman AKMI.
The Microfinance sector has played a key role in the state in providing credit support to vulnerable sections of population. India’s microfinance sector has recorded an overall portfolio growth of 21% during 2022-23, as per data from industry body Sa-Dhan. As per market data, the number of loan accounts for the microfinance industry increased to 136.3 million in FY23, from 123.9 million in FY22, posting a year-on-year (y-o-y) growth of 10%. From February 2017 to June 2022, the MFI sector underwent several transformations in terms of inclusivity and expansion, said the joint study conducted by consultancy major Price water house Coopers (PwC) and the Association of Microfinance Institutions of India.
The year 2022-23 was the first year with RBI’s new uniform regulations, applicable to all players in the micro-finance sector. The fact that the industry is back on track is an indication that the new regulations have been positive for the sector. The support of the RBI, the Central Government and the State government has been crucial. The industry has got back to normalcy after COVID disruptions, with healthy repayment collection rates for loans given and good growth of portfolio.
Microfinance sector has the potential to serve 10 to 15 per cent of the population living in India’s rural areas and is likely to build infrastructures to serve up to 30 per cent of the populations in the future. Microfinance will play a major role in India’s rural economic growth. MFIs don’t just offer loans but bring the most vulnerable people into the mainstream of Indian economy which is going to scale new heights over a few years’ time from now.
Financial inclusion is the way to have inclusive growth in our country. Microfinance Institutions have been playing a very crucial role in providing various financial services to the poor and low income household in Urban and Rural India. Reaching out to more than 2.67 Crores households with a loan portfolio of around 46000 Crores outstanding, the Micro finance industry’s contribution to the economy has been significant.
