Savings with microfinance providers rise 19%

Published: September 3, 2013
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Data shows MFBs were the biggest contributors to the savings, as they collectively added 310,000 depositors and Rs4.8 billion worth of deposits in the quarter under review. PHOTO: FILE

Data shows MFBs were the biggest contributors to the savings, as they collectively added 310,000 depositors and Rs4.8 billion worth of deposits in the quarter under review. PHOTO: FILE

KARACHI: The value of savings with Pakistan’s microfinance providers (MFPs) increased to Rs30 billion between April and June, reflecting a quarter-on-quarter surge of 19.4%, according to a Pakistan Microfinance Network (PMN) report released on Monday.

This jump was driven by a rise in the number of active savers, which increased to 5.2 million, up 8.4% from the preceding quarter.

Besides, an increase in average savings balance, which rose 10.2% to Rs5,763, also played a key role in enhancing the value of savings with MFPs.

Currently, there are eight microfinance banks (MFBs), 12 microfinance institutions (MFIs) providing specialised microfinance services, six rural support programmes (RSPs) running microfinance operations and eight other MFPs that run microfinance operations as part of a multi-dimension service offering, bringing the total number of MFPs in the country to 34.

Data shows MFBs were the biggest contributors to the savings, as they collectively added 310,000 depositors and Rs4.8 billion worth of deposits in the quarter under review.

Tameer Micro Finance Bank and Khushhali Bank were the biggest contributors in terms of both active savers and value of savings with the former adding 226,000 depositors and deposits worth Rs2 billion in the second quarter of 2013.

As for the overall microcredit outreach, the number of active borrowers grew moderately in the second quarter to 2.6 million, up 4% compared to the preceding quarter. By contrast, growth in the number of active borrowers had remained 7.5% in the first quarter of 2013.

Like the previous several quarters, growth in loan portfolio outstripped growth in borrowers. Gross loan portfolio posted a growth of 7.2% to close at Rs46.6 billion, as the sector continued to increase loan sizes. The average loan size at the end of June stood at Rs26,004, up 3.9% compared to the first quarter of the calendar year.

One key indicator of the well-being of the microfinance sector is PAR, or “portfolio at Risk > 30 days,” which is defined as the value of all loans outstanding at the end of the reporting period that have one or more instalments of principal due for more than 30 days.

It decreased marginally from 2.1% to 2% due to improvement in recoveries by MFIs during the three-month period under review.

Micro-insurance

Micro-insurance also exhibited a positive trend in the second quarter of 2013. The number of policyholders increased 5.5% to 3.1 million while the sum insured showed an increase of 7.4%, reaching Rs41.7 million.

Health and credit life policyholders increased in the second quarter by 6.9% and 4.4%, respectively. National Rural Support Programme (NRSP) remains the largest provider of micro-insurance with a 24.7% market share in terms of the number of policyholders and 29.8% in terms of the sum insured.

Published in The Express Tribune, September 3rd,  2013.

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