Surge: Microfinance savings’ portfolio expands by Rs9.3 billion

Number of savers in April-June jumped to 13.1m, increases 28.5% Q-o-Q.

KARACHI: The value of savings held with microfinance banks and institutions increased by Rs9.3 billion in the second quarter of 2015 to reach Rs52.9 billion.

With quarter-on-quarter growth of 21.2%, the surge in the value of savings ‘dominated’ the April-June quarter, according to the latest microfinance statistics released by the Pakistan Microfinance Network (PMN).

The number of savers in April-June jumped to 13.1 million, reflecting a rise of 28.5% over the preceding quarter.

However, there was a quarterly decline of 5.6% in the average saving balance in the most recent quarter when it equalled Rs4,023.

The break-down

In its commentary on the latest statistics, the PMN noted the increase in savings came on the back of microfinance banks whose number of depositors and the value of deposits increased by 40% and 22%, respectively, during the period under review.

Tameer Bank and Khushhali Bank were the largest contributors in terms of the value of savings: Tameer Bank added deposits worth Rs2.6 billion whereas Khushhali Bank increased its deposit base by Rs2.5 billion during the second quarter.

With 7.8 million depositors, Tameer Bank now accounts for 59% of the total active savers in the microfinance sector.

Micro-credit also expanded in April-June with the number of active borrowers increasing 5.6% from 3.2 million to 3.5 million, PMN data shows. The gross loan portfolio also posted growth of 9.8% by clocking up at Rs81 billion.

Akhuwat was the largest contributor in terms of the number of active borrowers. It financed about 50,000 new clients mainly in the agriculture and services sectors.

The increase in the gross loan portfolio was fuelled by the microfinance banks’ peer group, which added Rs4.2 billion into its portfolio owing to larger loan sizes. Khushhali Bank depicted the highest increase in its loan book, which increased by Rs1.5 billion.

Among the rural support programmes (RSPs), National and Sindh RSPs were the most prominent contributors to micro-credit outreach on the back of short-term seasonal loans provided for the harvest of rice and wheat crops.

Overall, the sector-wide portfolio-at-risk (PAR) decreased from 1.7% to 1.3% due to the improvement in recoveries by the peer groups of microfinance banks and RSPs.

In terms of micro-insurance, the number of policyholders grew marginally by 2.2% in April-June whereas the total sum insured increased by 11% over the preceding quarter.

The penetration rate of the microfinance sector increased from 12.1% in March to 12.8% in June due to an increase in overall outreach, the PMN said. Geographically, the number of districts covered by microfinance practitioners increased from 96 to 98 at the end of the second quarter.

The total number of branches increased by 141, or 5.4%, to 2,729 because of the NRSP that added 47 new branches in Punjab and Sindh.

Published in The Express Tribune, August 30^th, 2015.

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