Agree about the Operational part MFI. But this is now in the trending news in Economic Time over the last 2 week.
Here the ET article:
I just tried checking the earnings potential of the Manappuram MFI division in comparison to the growth mentioned in the ET article (specific to karnataka). I’m aware that Manappuram MFI division is not only based of karnataka.
MFI Growth in Karnataka Region- 59.9% (In Absolute Terms)
Total Gross loan Portfolio of MFI in Karnataka
As at March,2024 - 42,265 Cr
As at March,2019 - 16,946 Cr
=42265 - 16946
=25319/42265
=59.9%
Manappuram loan value growth - 59.5% (In Absolute Terms)
Loan Valued at amortised cost:
Annual Report (Micro Finance Loan Value at amortised cost)
As at March,2024 - 97405.11 Mn
As at March,2020 - 39374.98 Mn
=97405.11 - 39374.98
=58031/97405.11
=59.5%
As per RBI, the maximum lending limit is 2 lakh per family, Some MFIs are lending about ₹5-6 lakh per family, pushing poor people into a debt trap, Gowda told the media Monday evening after the DCs’ conference.
Govt will try to control the process of over lending to people, but what if the loan value grew at a similar rate in next five years. Even though MFI is only 20% of the profit share, but the potential is high for the current valuation in my view. any thoughts?