Microfinance sector sees 16.5% annual decline in Sep gross loan portfolio

The gross loan portfolio (GLP) in the microfinance sector fell 16.5 per cent year-on-year (Y-o-Y) to Rs 345.6 trillion in September 2025, which is also a decline of 6.3 per cent quarter-on-quarter (Q-o-Q). Credit bureau CRIF High Mark, in the latest edition of its quarterly publication MicroLend, noted that during this period, there was an improvement in portfolio quality with delinquencies in 1-180 days-past-due (DPD) segment falling to 5.99 per cent or 42 basis points (bps) on a Y-o-Y basis and 107 bps Q-o-Q, but the same in the 180-plus DPD was up 15.31 per cent, up sharply by 971 bps and 289 bps on an annualised and quarterly basis, respectively. According to the report, the sector’s focus continues to be on asset quality stabilisation, guardrails, and cautious credit expansion. Sustained moderation in GLP and originations volume signals ongoing risk mitigation, while improvements in short-term delinquencies highlights progress in portfolio management practices. The sharp rise in 180-plus DPD delinquencies, inclusive of write-offs, warrants continued attention to portfolio and risk recalibration initiatives to support long-term recovery.