Shares of payday loans and overdue debt decline: key microfinance data
The microfinance market was recovering in the third quarter after its key indicators declined as a result of the pandemic and restrictive policies, reports the 2020 Q3 Review of Key Indicators of Microfinance Organisations.
The volumes of loans and portfolios pulled back to 2020 Q1 levels, and the share of short-term payback loans dropped on the back of regulatory caps on daily interest, the effective interest rate and total debt, among other drivers. A rise was concurrently reported in the proportion of medium-term loans and loans to small and medium-sized business — thanks to the extra financing of microfinance companies focused on lending to entrepreneurs.
The review also highlights a drop in the share of overdue debt in microfinance companies’ total loan books.
The year-end deterioration in the pandemic situation is forecast to carry no strong negative implications for the operations of microfinance institutions, given the essentially targeted nature of restrictive measures in place and continued offline operations.
