Refreshed India Data Now Available
We are pleased to announce the launch of refreshed pricing data covering the Indian microfinance market.
This updated pricing data shows the current state of one of the world’s largest microfinance markets, as well as giving insight into pricing trends over time. Data was first collected by MFTransparency in India just before the microfinance crisis of 2010. The data now available shows the impact that subsequent regulatory changes and improvements in consumer protection practices have had on the market.
The data shows complete and comparable data on interest rates, fees, insurance costs and taxes charged on microloans in India, standardized in an annual percentage rate formula. The transparency of prices in India is also presented, using the Pricing Transparency Index, which shows the percentage of the loan price that is communicated by the lender’s nominal interest rate to the borrower.
Highlights of the India transparent pricing data include:
- High transparency – all products in the dataset display a high level of transparency, with 99% of borrowers receiving loans that have a Transparency Index in the highest quartile. This high level of transparency is a dramatic improvement from the earlier pricing policies and is due to the government prohibition of flat interest policies and compulsory deposits, as well as the limit on what fees can be charged.
- Low prices – contrary to trends seen in other countries, prices do not correlate to factors such as loan disbursement size or loan term. Average Full APRs of products range between 28% to 30%, across the range of loan sizes and loan terms. The price levels also represent a significant reduction from the prices seen in 2010.
- Small loan sizes – India continues to focus loans on the same target population as before, with the majority of borrowers (75%) accessing amounts between 5,000 to 15,000 INR ($80 to $250 USD) representing loans at less than 25% of GNI per capita. These are loans very much targeted at the bottom of the economic pyramid in comparison to microfinance in other countries.
- Integration with other services: Despite the relatively low prices, many MFIs still do bundle other training and technical services together with their credit product. In other markets, the higher cost of bundled services leads to higher prices, but the India prices still remain low relative to other countries.
The refreshed data was collected and analyzed in partnership with MFIN India and currently covers just MFIN membership. This constitutes 85% of the microfinance market, and 90% of regulated MFIs in India, covering loans given to 24.4 million borrowers. In our next stage of pricing transparency for India, non-MFIN members will be invited to refresh their pricing data.
It is our pleasure to invite you to view the updated India data on the MFTransparency Pricing Data Platform. The data will also soon be available for direct download via the Truth In Lending (TILT) csv files.