BENGALURU: Microfinance Institutions (MFIs) are a preferred choice for 89 per cent of customers over other lenders in Karnataka, a recently released ‘Microfinance in Karnataka - Sector Report 2023’ revealed.
N Srinivasan, former Chief General Manager, National Bank for Agriculture and Rural Development (NABARD), said that customers return to MFIs in multiple cycles on account of the utility and functionality of the microfinance credit. Many customers have improved their livelihoods and quality of life through sustained access to microfinance.
The report was released at the Microfinance Karnataka Summit – 2023 organised by the Association of Karnataka Microfinance Institution’s (AKM) highlighting the growth of MFIs in the state.
The summit observed the importance of MFIs in providing financial services to the poor and low-income households in rural and urban India with over seven crore borrowers benefitting from it. In Karnataka, MFIs have benefitted one crore people with a portfolio of 46,000 crores outstanding on March 23.
The impact study also noted that women have emerged to have greater autonomy in income generation activities and have gained better space in family decision-making. India’s microfinance sector has recorded an overall growth of 21 per cent in 2022-23, according to Sa-Dhan, an association of community development finance institutions in India. The market data also showed that the number of loan accounts for the MFIs has increased to 136.3 million in FY23 from 123.9 million in FY22.