Domestic rating agency ICRA on Monday revised downwards the FY2022 growth outlook for assets under management (AUM) of NBFC-MFIs to 12-14 per cent but expects it to improve to 18-22 per cent in the financial year 2022-23. The agency said it expects the long-term outlook for non-banking financial companies-microfinance institutions (NBFC-MFIs) to remain robust, driven by the growth in disbursements is expected to have continued in Q3 FY2022, after the revival in Q2 FY2022. “The same is likely to be continued going forward, supported by healthy demand in the industry, increasing level of economic activity and increasing vaccination in the country," the agency said in a report on Monday.

 

Its Vice-President and Sector Head (Financial Sector Ratings) Sachin Sachdeva said the disruptions caused by the second wave impacted the AUM growth of the industry in H1 FY2022 as the movement of people was greatly hindered and the entities focused on collections instead of disbursements. The steady increase in the disbursements in the industry from the second quarter of the financial year 2021-22 provides hope for better growth prospects in the current financial year. However, in view of the muted performance in H1 FY2022, ICRA has revised the FY2022 growth outlook for the AUM of NBFC-MFIs to 12-14 per cent. "The growth rate in the AUM of NBFC-MFIs is estimated to improve to 18-22 per cent in FY2023," Sachdeva said.