The microfinance sector may be in the last leg of the demonetisation-led sufferings and looks to grow double digit next quarter, captains of the industry said.The microfinance companies, which had collectively written off about Rs 5,000 crore of loans in the first two quarters, are expecting sizeable recovery from these accounts, said Ratna Vishwanathan, former chief executive at Microfinance Institutions Network, the self-regulator for the sector. But it would be difficult to put a number at this point.Loan repayment took a severe hit in the cash-based sector after the government announced note-ban in November 2016. The situation deteriorated further when small borrowers in five states including Uttar Pradesh and Maharashtra stopped repaying loans after the respective governments announced farm loan waiver.The Vidarbha region in the eastern part of Maharashtra alone accounted for 35% of the loan write-offs.Bandhan Bank, one of the leaders in micro loans, said the difficulties in repayment collection from the borrowers who defaulted between November and December 2016, are gradually tapering off.”There had been problems in repayment collection after demonetisation was announced. But we haven’t made substantial write-offs”, Bandhan Bank managing director Chandra Shekhar Ghosh said at the Eastern India Microfinance Summit.The bank with about 90% micro loans in the total loan portfolio saw its gross non-performing assets ratio slipped to 1.26% at the end of September last year from 0.82% at the end of June due to the lingering effect of note-ban and loan waivers in some states.”We are in the last leg of the demonetisation effect and things will be better by the end of this fiscal”, Ujjivan Small Finance Bank Managing Director Samit Ghosh said. Ujjivan Financial Services, the holding firm for the small bank, has written off Rs 300 crore worth of loans.Kolkata-based Village Financial Services, which has Rs 510 crore portfolio, looks to expand to states like Jharkhand and Madhya Pradesh with the dust settling down.The microfinance sector grew 5% to Rs 111,539 crore at the end of September, MFIN data showed. Banks are the largest provider of micro-credit with a loan outstanding of Rs 40,076 crore and accounting for 36% of total micro loans, excluding loans given to self-help groups. NBFC-MFIs as a group are the second largest provider accounting for 32% to total industry portfolio and small finance banks enjoys 25% share. NBFCs account for another 6% and non-profit MFIs account for 1% of loans.