MFIs

While Provisions bill dips; income flows stay subdued

At right price, ARCs are eager to acquire the portfolio

After quarters of liquidity stress and high delinquencies, India's microfinance sector shows revival signs, though experts say sustained recovery depends on stronger bank and government support

The fall in new delinquencies in the microfinance industry has slowed, delaying recovery by a quarter, with meaningful earnings growth expected only from Q4 FY26 or FY27

Bihar, Assam, Kerala, Tamil Nadu and West Bengal - which go to polls between the latter half of 2025 and the early part of 2026 - account for 42 per cent of microfinance institutions' (MFIs) portfolio

MFIN seeks a ₹15,000-₹20,000 crore government-backed credit guarantee to encourage banks to lend to NBFC-MFIs, citing improved collection efficiency and liquidity needs

The Reserve Bank does not have any concern on asset quality from unsecured loans perspective, including microfinance (MFI), Governor Sanjay Malhotra said on Wednesday. The system NPAs (non-performing assets) are also "satisfactory", Malhotra told reporters, stressing that the proportion of dud assets is not increasing. Recalling that the NPAs in the unsecured segment like personal loans and credit cards, and also MFI, were indeed seen to be rising, Malhotra said the RBI acted by raising the risk weights which had the intended impact of slowing credit growth in the segments. "We have seen a slowdown in credit growth there. From an overall perspective, this (NPAs in unsecured loans and MFI) is not a cause of concern for us," he said. Malhotra also assured that MFIs, which serve the bottom of the pyramid and help deepen financial inclusion, will get all the attention as is required. Meanwhile, allaying fears of a decline in deposit rates leading to a shift of deposits to avenues beyo

Asset quality stress in the NBFC-MFI sector surged in 2024-25 amid borrower overleveraging as well as operational challenges, and the pressure is expected to persist in first half of the current fiscal, a report said. ICRA's July 2025 analysis on the Non-Banking Financial Company - Microfinance Institution (NBFC-MFI) said that the AUM of the sector declined 12 per cent in FY2025. However, the rating agency said it anticipates growth to resume in FY2026 to 10-15 per cent. As per the report, asset quality stress surged in FY25 largely due to borrower overleveraging, sociopolitical disruptions, and operational challenges. ICRA has a negative outlook on the sector, given the lingering asset quality stress and subdued profitability. Overall stress in FY2025 surged to 15.3 per cent vis--vis opening stressed pool of 5.9 per cent as of March 2024 on account of significant deterioration in asset quality in the microfinance sector, the report said. Given the deterioration in asset quality,

IDFC First Bank chief says not insuring the microfinance portfolio earlier worsened FY25 losses but confirms that 66 per cent of the book is now covered under CGFMU

Central bank has taken a sympathetic view of institutions by easing some lending norms

RBI relaxes qualifying criteria for NBFCs to be treated as MFIs

Darkest hour is over, MFI stocks soar 15-21% as crisis turns into catalyst

We will take initiatives on Casa next financial year, says Ashok Chandra

CreditAccess, L&T Fin, RBL Bank, Poonawalla Fincorp, Five-Star Business Finance, Ujjivan SFB, Shriram Finance, Cholamandalam, M&M Financial, AU SFB and Bandhan Bank were up in the range of 4% - 15%.

The provisions and write-offs of these MFIs jumped to Rs 2,357 crore in Q3fy25 from Rs 378.1 crore a year ago

NBFCs can assess a customer differently and provide a credit solution that differentiates them from banking (companies)

Microfinance has shown capability and resilience in every crisis: Demonetisation or Covid-19. Attention to the issues it faces can make the sector even more vibrant

The dealing with internal factors would mean entities require more discipline and emphasis on corporate governance and compliance

In 2022, the RBI updated regulations for MFIs, which now apply to all entities in the sector, including banks, small finance banks, and non-banking financial companies (NBFCs)

Lenders slam brakes on disbursals amid rising stress