Sectors that offer opportunities for transformation

A journey that unleashes the potential to change lives and fortunes.

The microfinance sector in India, predominantly follows the Joint Liability Group mode, where borrowers form groups and guarantee each other. The sector has shown significant progress over the years with Indian MFIs having taken steps towards strengthening their governance, management and operations and building efficiencies by reducing costs while maintaining good portfolio quality.

MFIs now serve more than a 100 million borrowers, potentially the largest borrower base in the world. Microfinance portfolios have shown low delinquencies with steady-state collection efficiency around 99 percent.

The industry is regulated by the Reserve Bank of India and follows the requisite governance and reporting standards. The allotment of 8 of the 10 Small Finance Bank licenses to MFIs, is a testament to their strength and contribution towards creating a more inclusive India.

Given the regulatory push for financial inclusion, Northern Arc sees a big opportunity in sectors such as Microfinance and Small Business Finance, expecting the sector to grow at around 40 percent over the next few years.