Impacted by the COVID-19 pandemic, the microfinance industry in India grew at a slower rate of 31% in 2019-20, closing the year with loan portfolio outstanding of over ₹2.36 lakh crore, industry body Sa-dhan said on Monday, adding that it expects growth to further slowdown to 15% in the current year. “While the year started on a positive note, the pandemic in the last quarter of fiscal 2019-20 threw a dampener on our projected growth. To add to the woes of the industry, people were deeply affected by natural disasters in certain States of the country and a spurt in spread of fake news by groups with vested interests,” P. Satish – executive director at Sa-Dhan.Mr. Satish added that the nationwide lockdown during the first quarter of the current fiscal due to COVID-19 resulted in almost no disbursements. “However, since July we are witnessing a rise in repayments and disbursement. Despite unprecedented challenges, we expect the industry to grow but more modestly this year at around 15%, given that the first two quarters saw much reduced activity (repayments and fresh disbursements) due to the lock down and ensuing moratorium. Mid and small MFIs have also been severely affected with a liquidity squeeze and high cost of funds,” he added.As per data collated from 252 lenders, including microfinance institutions, not-for-profit microfinance institutions, NBFCs, SFBs, and banks, loan portfolio outstanding stood at over ₹2.36 lakh crore as on March 31, 2020. Of the total portfolio, 32% is from NBFC-MFIs, whereas banks and SFBs together contributed to 59% of the portfolio.The year-on-year growth of loan outstanding at 31% is substantially lower than the growth of 41% seen in FY 2018-19, the industry body noted.