Microfinance

The initiative aims to improve governance and operations as smaller MFIs say access to bank funding remains constrained

Microfinance loans increased for the first time after seven consecutive quarters of decline, although the number of borrowers continued to contract during the January-March 2026 quarter, according to the RBI's latest Financial Stability Report (FSR) released on Tuesday. The RBI said the borrower base shrank by 22.7 lakh in the latest quarter, indicating that while lending activity has started picking up, the sector is still witnessing consolidation in its customer base. The central bank also pointed to a continued improvement in asset quality as the share of 31-180 days past due (DPD) declined for the fifth successive quarter. This reflects that the asset quality has improved after the guardrails were adopted by the sector. According to the report, the 31-180 DPD of banks stood at 2.5 per cent, which is the highest among all lenders involved in MFI lending. This was followed by 2.0 per cent each by overall and small finance banks, 1.9 per cent of NBFC-MFI, and 1.6 per cent of ...

CRIF High Mark data showed the microfinance industry's loan portfolio expanded in May as delinquencies eased further, while fresh loan disbursements remained broadly stable

Asset quality improved and earnings strengthened in Q4FY26, but rural stress, microfinance exposure, West Asia tensions and monsoon risks could weigh on NBFCs in FY27

India's microfinance sector is recovering as defaults fall, loan sizes rise, and government guarantees extend to boost cheaper credit to small borrowers

Crisil Ratings says lending guardrails have improved portfolio quality and credit discipline, leading to a sharp reduction in overdue build-up in microfinance securitised pools

India's microfinance sector is seeing early revival signs as lenders prioritise asset quality and portfolio consolidation over aggressive loan growth after two years of slowdown

The SIDBI-Equifax report said the sector's portfolio grew 3 per cent quarter-on-quarter in the March quarter, while 30-plus delinquency fell sharply

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

Hello and welcome to BS Opinion, a wrap of editorials and columns on today's Opinion page

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