The size of the very sticky microfinance loans, which remained unpaid even after 180 days of their due dates, swelled to about a tenth of the total portfolio which reached Rs 24,500 crore, shortening the odds on more future write-offs by lenders.

Three months ago, the aggregate size of sticky loans was estimated at Rs 20,000 crore or about 8% of the microfinance book.

“PAR 180+ DPD continued to increase, reaching 9.3% as of December 2021. Maharashtra, West Bengal and Madhya Pradesh contributed the highest toward flow into PAR 180+ DPD,” said CRIF High Mark Credit Information Services.

PAR denotes portfolio at risk, while DPD means days past due.

The credit bureau said that gross microloan portfolio grew 10.4% year-on-year to Rs 2.64 lakh crore by the end of December last year.

PAR 180+ DPD refers to the proportion of portfolio delinquent by more than 180 days past due, excluding write-offs, calculated as percentage of total portfolio outstanding. The risk of non-recovery increases when borrowers do not pay for a long time.

There could be a need for more technical write-offs for the loan accounts that are backed by provisions but recovery is not happening, Suryoday Small Finance Bank managing director R Baskar Babu said.

“But presently, we are seeing a traction in technically written-off customers coming back and paying as things have settled down,” he said.

Write-off does not mean that the loan is waived. Lenders chase borrowers even after writing off their loans.