Press Release

India Microfinance Market is Being Fueled by Loans Provided by NBFCs

The increasing demand for microfinance services among low-income group, government policies and diversification of services provided by the microfinance companies are driving the growth of microfinance market in India.


According to TechSci Research report, “India Microfinance Market- By Region, Competition Forecast and Opportunities, 2019-2029F,the India microfinance market is witnessing high demand owing to the rising awareness regarding microfinance among consumers and the services provided by companies through online mode.    

The idea of "microfinance," a type of financial service that offers small loans and other financial services to poor and low-income households in a consistent and legitimate manner, was born out of the need to support low-income families in developing nations like India as well as uplift and provide them with a better standard through financial support in a more efficient way. It is an economic instrument created to encourage financial inclusion, which enables low-income and impoverished households to escape poverty, raise their income levels, and generally improve their standard of living. It can make it easier to implement national policies aimed at raising living standards, empowering women, reducing poverty, and supporting vulnerable populations.

Nearly 50% of people in India do not have a straightforward savings account. However, in order to realize their objectives of wealth accumulation and risk mitigation, they require financial services, and due to microfinance, people with restricted access to capital can do so. If microfinance organizations hadn't been lending to this segment of society, these groups would have turned to borrowing money from friends or family. They are more likely to select payday loans or quick cash advances, both of which have incredibly high interest rates. Microfinance helps these organizations make wise investments in their businesses, supporting the government's objective of financial inclusion in the country.

As India's economy has grown, so has the demand for credit. Many people are looking to start small businesses or expand existing ones, but traditional banks are often unwilling to lend to them. MFIs offer a more accessible alternative, providing loans that are tailored to the needs of small business owners and entrepreneurs.

Advances in technology have made it easier for MFIs to reach customers and manage their operations. Mobile banking and other digital platforms have enabled MFIs to provide services to remote areas and reduce transaction costs. This has helped to increase the efficiency of the sector and make it more attractive to investors. In India, the microfinance industry has access to a variety of financing sources, such as grants, debt, and equity. This has made it possible for MFIs to grow their businesses and attract additional customers.

With a variety of stakeholders, including banks, governmental bodies, and other organizations, MFIs in India have developed significant partnerships. These collaborations have aided in extending the sector's influence and advancing financial inclusion.


Browse over XX market data Figures spread through XX Pages and an in-depth TOC on "India Microfinance Market


Key market players in the India microfinance market include:

  • Ujjivan Financial Services Limited
  • Asmitha Microfin Ltd.
  • Utkarsh Small Finance Bank Limited
  • CreditAccess Grameen Limited
  • Share Microfin Limited
  • Spandana Sphoorty Financial Ltd.
  • Bhartiya Samruddhi Finance Limited (BSFL)
  • Bharat Financial Inclusion Limited
  • BSS Microfinance Limited
  • Muthoot Microfin Limited


The India microfinance market is segmented based on provider type, purpose,  tenure, region and competitive landscape. Based on provider type the market is divided into banks, NBFCs, Fintech. Based on purpose, the market is fragmented into agriculture, manufacturing/production, trade & services, household and others, including consumer durable, vehicle, etc. Further, based on tenure the market is segmented into less than 1 year, 1-2 years, and more than 2 years.

Based on provider the banks are in more demand as the people in rural areas are mostly in the need of unsecured loans and have trust on small finance banks in their areas which is significantly resulting in high demand for the banks as a trustable and easy solution for loans for different uses.


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“Due to a number of factors, including lack of access to formal financial services, rising credit demand, government support, technological advancements, strong performance, social impact, growing competition, regulatory environment, access to capital, and strong networks of partnerships, the microfinance sector in India has seen significant growth in recent years. These factors will probably continue to have a substantial impact on the sector's growth as it continues to develop,” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.

“India Microfinance Market By Provider Type (Banks, NBFCs, Fintech), By Purpose (Agriculture, Manufacturing/Production, Trade & Services, Household, Others (Consumer Durable, Vehicle, etc.), By Tenure (Less than 1 Year, 1-2 Years, More than 2 Years), By Region, Competition Forecast & Opportunities, 2019-2029F,” has evaluated the future growth potential of India microfinance market and provides statistics & information on market size, structure, and future market growth. the report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the microfinance market in India.


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