* Research Officer, CRFIM, BIRD, Lucknow. Email: bhawanirathore15081979@ gmail.com ** Assistant General Manager BIRD, Lucknow. Email: gyanendra.rout@nabard.org *** Director, BIRD, Lucknow. Email: dv.deshpande@nabard.org Despite the robust growth in Microinance Institutions (MFIs) in the past few years in India, growth in the number of clients lags behind the growth in loan portfolio. In this context, the study analyses the outreach of different categories of MFIs in terms of breadth, scope and depth. It recommends developing an ecosystem of ‘Not- for-Proit’ companies to create an alternate model of microinance based on overall development of the clients. Key Words: Microfinance Institutions, NBFC-MFIs, Poverty Outreach Performance of the MFI Sector: An Empirical Study - Bhawani Singh Rathore*, Gyanendra Rout** and D V Deshpande*** Abstract Microfinance Institutions (MFIs) have seen incredible growth in the past few years in India. However, there is a concern that the growth in the number of clients lags behind the growth in loan portfolio. In this context, this study intends to analyse the outreach of different categories of MFIs in terms of breadth, scope and depth. The study uses both, MFI-level and client- level data. The client-level data is drawn from 600 clients of 10 MFIs in five states. The MFIs were chosen from categories based on legal status and scale of operation. Larger Non Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) were found to be having better geographical spread. However, in terms of other breadth of outreach variables, the performance depends upon the delivery models rather than the legal status and the scale of operation. In terms of scope of outreach, non- NBFC MFIs (like Annapurna Co-operative) were found to be better performing. The poverty outreach of the sample MFIs is much lower than the National Poverty Line. The study suggests developing an ecosystem of ‘Not-for-Profit’ companies in India for creating an alternate model of microfinance based on over- all development of the clients. Additionally it also recommends introducing well-designed saving products and low-cost health and education services for the poor so as to ensure poverty reduction on a sustainable basis. Introduction The Indian MFI sector has seen incredible growth over the past few years with growth rates surpassing the pre-crisis growth rate. The sector has returned to high growth after slackness post Andhra Pradesh crisis in 2010. As per CRIF High