India microfinance market: 23.5% CAGR growth forecast between 2012-2016

Press Release   •   Aug 21, 2013 16:08 BST

The India microfinance market is to grow at a CAGR of 23.49 percent over the period 2012-2016. One of the key factors contributing to this market growth is the enormous potential of the untapped market. The Microfinance market in India has also been witnessing increasing commercialization of loan portfolio. However, over-indebtedness to microfinance vendors could pose a challenge to the growth of this market.

Due to the recent financial crisis, many MFIs have altered their legal structure and turned into companies to float their equity and bonds to be able to generate more funds. This was nothing but a consequence of their higher dependence on donors and lesser sustainability. Lately, MFIs are going through the phase of mission drift wherein they are molding their social objectives to become financially sustainable. This has enabled MFIs to become sustainable.

One of the key growth drivers for this market is the enormous demand in the untapped market where the market players have not yet been able to reach. These include regions such as the North-East and the northern most parts of the country. Post the crisis, the market has been growing at a consistent rate of growth which is a positive trend encouraging new entrants in the market.

For more information on the India microfinance market, please click here: India microfinance market

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