North-East: Low on banking, Average on microfinance

An article recently released by RBI, titled 'Financial Inclusion through Microfinance - An Assessment of the North-Eastern Region of India', authored by S. Chinngaihlian and Pallavi Chavan, documents the spread of microfinance in the NorthEast. Despite a smaller share in the total microfinance portfolio, the North-East scores reasonably well on most indicators of access and usage of microfinance.

N-E: LOWEST AMONG ALL REGIONS 

The microfinance portfolio is skewed with the Eastern and Southern regions together accounting for close to 60% of the total amount of microfinance disbursed and number of active microfinance loans in 2021-22. Going by the striking ascent of microfinance in the Eastern region in recent years, it can be concluded that this region has emerged as another hub of microfinance. Despite its proximity to the Eastern region, the share of the NorthEast has been in single digits and the lowest among all regions; the region has, in fact, been seen losing its share in recent years.

Almost all districts from the eastern region were covered by microfinance from banks in 2020-21. Similarly, in the Southern region too, banks provided microfinance in about 84% of the districts. The coverage of women through SHGs linked to banks through credit was also the highest in the eastern and southern regions.