MFO market trends: loan disbursements expand, with NPL growth slowing
Over the period from late March through early May, loans disbursed by microfinance organisations (MFOs) were steadily decreasing, dragged down by the closure of offices due to the restrictions in place and the tightening of scoring models aimed at mitigating credit risk. However, beginning from
After the restrictions were imposed, the quality of MFOs’ portfolio was deteriorating, with non-performing loans (NPLs) increasing in almost all microfinance market segments. In the second half of April, however, when companies started to actively implement the programmes for loan restructuring and loan repayment holidays, the NPL growth rates began to slow down. As a result, at the end of April, NPL90+ decreased by as much as 1.4 pp over one week, which was also associated with the sale of a part of debt.
Ultimately, major companies’ NPL90+ was up by approximately 5 percentage points as of the end of the second ten days of May, as compared to early 2020.
By
The portfolio of funds raised by MFOs over the period under review remained stable, without any significant outflow. The portfolio shrank by about 3%. Concurrently, bank financing for MFOs expanded by 24.3%.
Over the first week after the May holidays, loan repayments considerably increased (+26%) after their prolonged reduction. Among other factors, that downward trend in repayments had been provoked by the May holidays.
The period of the restrictions reduced the list of MFOs: from
As of 21 May 2020, the register numbered 1,684 MFOs.