India’s 25 Leading MFIs

This paper carries an opinion piece on CRISIL’s near to medium term outlook for the microfinance sector in India. It also highlights the key role of securitization in the resource profile of MFIs and provides a commentary on the strong performance of CRISIL-rated MFI securitization transactions. The paper provides CRISIL’s analysis of the key strengths and challenges of the leading 25 players in the Indian MFI space. It covers the following sections in detail:

• Background of the microfinance sector in India with a focus on expected growth trends, stakeholder confidence, capitalization, expected profitability of MFIs, and their asset qualities;
• Securitization as the key source of MFIs’ funding with a focus on trends, importance, and recent developments with respect to securitization;
• Unique features of CRISIL-rated microfinance securitization transactions;
• Improvement in operating environment: integration of technology with collection practices, borrower discipline, and improvement in regulatory environment;
• Challenges that exist (defaulting customers, geographic concentration risks, administrative risks etc.);
• CRISIL’s outlook on MFI securitization transactions and MFIs’ exposure to risks;
• Brief profile of India’s 25 leading MFIs with a focus on their performance on key parameters such as portfolio performance, capitalization, amount outstanding, and profitability.