Mumbai, July 1 -- Microfinance institutions (MFIs) are expected to return to stronger growth this financial year, with their assets under management (AUM) projected to expand around 20 per cent, up sharply from 4 per cent growth in the previous fiscal, driven by a recovery in microfinance lending and faster expansion in non-microfinance loans, according to a Crisil Ratings report released on Wednesday.

The report said MFI AUM growth will be supported by a gradual recovery in the core microfinance portfolio, which is expected to grow around 13 per cent after slowing last fiscal. It added that the bigger growth driver will be the expanding non-microfinance portfolio, comprising gold loans, MSME loans, loans against property and individual ...