Microfinance

India's microfinance sector recorded its first sequential portfolio expansion in seven quarters, while asset quality improved and disbursements reached a seven-quarter high

While overall asset quality improved in April, a rise in early delinquencies and slower loan disbursals indicate lenders remain focused on portfolio discipline

The government has approved the extension of the Credit Guarantee Scheme for Microfinance Institutions - 2.0 and a hike in the maximum loan limit to Rs 1,000 crore. As of date, loans totalling Rs 770 crore have been sanctioned under the scheme, the Finance Ministry said in a statement. The CGSMFI-2.0 scheme was introduced on March 20, 2026, and aims to provide guarantee cover to Banks/ FIs through National Credit Guarantee Trustee Company Limited (NCGTC) against expected losses on the financial assistance extended by them to NBFC-MFIs and MFIs for on-lending to small borrowers. The scheme was valid till June 30, 2026 or loans up to Rs 20,000 crore are guaranteed, whichever is earlier. "The Government of India has approved extension in validity of the Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) up to August 31, 2026, or till guarantees for an amount of Rs 20,000 crore are issued, whichever is earlier," the ministry said. The government has also approved a

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India's microfinance model has reached its limits; sustainable growth now requires a shift towards meso-finance, stronger savings buffers, and less reliance on group lending.

Large microfinance institutions are diversifying into retail and MSME lending as regulatory changes and recent sector stress reshape growth strategies

India's microfinance sector saw slower loan growth and disbursements in FY26, though asset quality improved sharply amid tighter underwriting and credit monitoring

NBFC-MFIs led the growth in microfinance originations during Q4FY26, while higher average ticket sizes and continued lending to existing borrowers supported disbursement momentum

MFIN has backed the RBI's advisory against misleading loan waiver campaigns amid rising misinformation and borrower mobilisation efforts in parts of North India

The microfinance business will remain cautious for some time to come despite a ₹20,000 cr credit guarantee scheme

Lending to women continues to grow, but share of first-time borrowers declines in microfinance, even as retail credit sees rising participation

NCAER-MFIN survey shows sharp fall in informal borrowing and full digitalisation of loan disbursements, with most loans now used for income-generating activities

Scheme aims to ease liquidity constraints, boost credit flow to small borrowers, and support microfinance institutions with graded guarantee cover and lending norms

Improving asset quality and disbursement trends support outlook, but risks from Bihar legislation, geopolitics, and climate factors may weigh on growth

Loans above Rs 75,000 now account for 38% of microfinance disbursals, reflecting lenders' growing preference for larger exposures to existing borrowers, says Equifax-SIDBI report

Shares of microfinance focused lenders saw sharp drop on Friday

Fusion Finance has rallied nearly 18% in a month after returning to profit in Q3FY26. Brokerages cite improving asset quality, lower credit costs and strong capital buffers

KVB MD B Ramesh Babu talks about the future road map, product strategy, and business growth

In a post-earnings analyst call, ICICI Prudential Life Insurance's management said the MFI-linked credit life segment has begun to revive during the quarter

With clearer RBI norms, easing microfinance stress and digital-first models, small finance banks are set for steady growth and deeper reach among underserved customers