Arohan Financial Services Limited | Annual Report 2021-22

As per CRISIL, the industry is expected to grow at a CAGR of 15%- 16% to reach ~ INR 5.82 Lakh Crores by 2025. The primary drivers for this growth rate are the new Reserve Bank of India guidelines on microfinance, rising penetration in rural and low income states, widening client base and increasing ticket sizes. Major Events of Fiscal Year 2021-22 New RBI Master Circular On March 14, 2022, the Reserve Bank of India released a set of new guidelines for microfinance lending, called “MasterDirection- 5.70 *Data as of last available MFINMicrometer, dated December 2021. 5.10% 46 Annual Report | 2021-2022 Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022”, applicable to lending entities involved in microfinance activities including Banks, SFBs and all NBFCs. This is a paradigm shift from the earlier microfinance guidelines, which were applicable only to NBFC-MFIs. The existing pricing guidelines, indebtedness and income limits for microfinance loans have also revised in the newMaster Direction.