Gold loan finance companies are passé, now microfinance is the flavour of the season. After the Reserve Bank of India put in place stringent regulations, following a crisis in Andhra Pradesh, the sector has shown a robust growth. The gross loan portfolio or assets under management for the sector has shown a 48% compounded annual growth rate since FY13 to touch 533 billion. Importantly, the growth was led by over a two-fold increase in the number of borrowers from 14.8 million in FY12 to 32.5 million in FY16 and a 21% rise in value, according to a report on the sector by Centrum. The ticket size per borrower stood at 16,379 against 7,550 in FY12. Unlike the pre-FY12 period when the action was concentrated in the south especially in Andhra Pradesh, the action has now shifted to newer states. The report mentions that over the past four years, the states of Uttar Pradesh and Madhya Pradesh have come to the fore, comprising 20% of total gross loan portfolio. Interestingly, the contribution of the Andhra market has gone to practically zilch, post the new regulations. Caps on lending rates linked to the base rate of top five banks — 10% lower for MFIs with total assets above 1 billion and 12% for assets below 1 billion — have created lending discipline, adds the report. With the untapped opportunity pegged at close to 3 trillion, the report states the industry is expected to grow at 30-35% in the coming years. Now, wait for a crisis to vet that one.