Small savings soar 25pc to Rs43bn in 2014: report

LAHORE: Total savings of microfinance institutions soared 25 percent to Rs43.497 billion in 2014 as their rate of returns is relatively higher, a report by a non-profit network of microfinance providers revealed on Wednesday.
In 2013, total small savings amounted Rs34.78 billion, showed the data released by the Pakistan Microfinance Network (PMN).
Currently, the PMN has 50 registered members, including microfinance banks (MFBs), National Rural Support Programmes (NRSPs) and others.
Microfinance institutions (MFIs) offer more than 11 percent rate of return to their depositors.
The numbers of small savers stood at 8.52 million by the last yearend, up 43 percent as compared to 5.97 million in 2013 in the comparable period.
“The surge came on the back of deposit-led strategy adopted by MFBs,” said the PMN, funded by UK-AID, Citi Foundation and Pakistan Poverty Alleviation Fund. “MFBs have created awareness about the usefulness and security of money deposited with them.”
Terming the branchless banking as an attraction to small savers, the report added, “The depositors can now conveniently save their money near the doorstep, which encourages them to prefer bank accounts over home lockers, which are relatively unsafe.”
During the October-December quarter, the number of active savers and saving volume grew nine percent and 14 percent, respectively, over the previous quarter, the data showed.
The share of MFBs in total active savers of MFIs reached 62 percent in the fourth quarter of the last year, up three percent from 59 percent in the third quarter.
Tameer Microfinance Bank (TMFB) recorded 517,276 new depositors, which were highest among all counterparts, while NRSP, a nonprofit microfinance bank, led the inflows of deposits, witnessing an increase of Rs1.6 billion.
However, the numbers of borrowers grew meager one percent in Oct-Dec, while gross loan portfolio was up three percent. An average borrowing size reached Rs30,000 for the first time.
Akhuwat led MFIs in extending microcredit outreach, covering 57 districts and catering 317,000 borrowers in the fourth quarter as against 53 districts and 276,000 borrowers, respectively, in the previous three-month period. Its gross loan portfolio touched Rs3.7 billion.
The PMN further said MFBs witnessed a two percent drop in the tally of active borrowers, primarily due to non-performing loans written off at the end of the year.
The report said microinsurance sector enjoyed a positive trend in the fourth quarter of the last year as the numbers of policyholders rose seven percent and total insured sum surged 20 percent over the previous quarter.
Alone, TMFB added 111,000 new policyholders and sum insured of seven billion rupees in the quarter under review. NRSP, accounting for the largest share in microinsurance sector, added 66,000 new policyholders and insured amount worth Rs1.3 billion.