Microfinance

Sustained moderation in GLP and originations volume signals ongoing risk mitigation, while improvements in short-term delinquencies highlights progress in portfolio management

While the microfinance sector appears to be recovering from its latest stress cycle, liquidity support will be crucial to sustain the return path

Industry leaders at the Business Standard BFSI Insight Summit said that while collections and rural affordability are improving, liquidity support is critical to sustain the sector's ongoing recovery

Microfinance lender sees profit decline amid higher write-offs, but net interest income and margins show sequential improvement

NBFCs and fintechs are filling the gap left by cautious banks in micro lending, even as regulators monitor rising exposure and borrower indebtedness in the segment

The microfinance industry is in a bind as funding declines and fears of defaults swirl amid stricter regulatory scrutiny

The industry's fund crunch comes over lenders' fears of asset quality, repayment, and over-leverage, which ties in to the Reserve Bank of India's push for responsible lending

ICRA has downgraded SATYA Microcapital's ratings to BBB with a negative outlook, citing rising NPAs, weak collections, high credit costs and limited capital buffers

Data from insurers' annual reports show ICICI Prudential Life Insurance covered 91.74 million lives in FY25, down from 96.61 million in FY24

Fusion Finance plans Rs 200 crore recovery from stressed assets, redeploys staff for collections as NPAs ease and new customer share to rise by FY26

Fusion Finance shares rose on improved Q1 performance, with lower credit costs, better asset quality, narrower losses, and stronger operational efficiencies

The lack of access to credit information leaves Section-8 MFIs in the dark about the worthiness of their clients, while allowing borrowers to exploit the arbitrage between Section-8 and mainline MFIs

CreditAccess Grameen's Q1 FY26 net profit dropped 85% YoY, attributed to lower net interest income and higher provisioning. However, sequentially, the profit rose by 27.5%

Despite rising stress in microfinance portfolios, RBI notes decline in borrower indebtedness as tighter underwriting and regulatory caps limit over-lending

Microfinance can never be a sunshine sector because every 5-6 years it gets into some kind of challenges, says Revankar

Microfinance sector sees worsening credit metrics in FY25 with PAR 31-180 and NPAs rising sharply amid disbursal decline and external disruptions, says MFIN

Loan disbursed by microfinance institutions (MFIs) have declined by 25 per cent to Rs 1.12 lakh crore in FY25 reflecting stress in the sector. Loan amount of Rs 1,12,459 crore was disbursed in 2024-25 through 2.2 crore accounts, including disbursement of owned as well as managed portfolio, Microfinance Institution Network (MFIN), an umbrella body of the microfinance institutions (MFIs), said in its report released on Wednesday. MFIs loan disbursement in FY25 was 25.4 per cent lower than the amount disbursed in 2023-24, it said. However, the average loan amount disbursed per account during FY25 was Rs 50,131 which increased by 12.3 per cent in comparison to the last financial year. During the year, the report said, NBFC-MFIs received a total of Rs 57,307 crore in debt funding, a 35.7 per cent decrease from previous year. Banks contributed 78.4 per cent of the total borrowing received followed by non-bank entities 11.9 per cent, ECB 5.1 per cent, All India Financial Institution 3.1

RBI Deputy Governor M Rajeshwar Rao warns of high interest rates, borrower over-indebtedness, and coercive recovery in India's microfinance sector, calls for urgent lender reforms

RBI relaxes qualifying criteria for NBFCs to be treated as MFIs

Amid these shifts, CRIF High Mark emphasised that the sector remains on a path of long-term sustainability