Loan portfolio of microlenders reduced by 2.3 per cent quarter-on-quarter to Rs 4.32 lakh crore in April-June while NPAs surged, a report said.
Notably, for the last few months, microfinance institutions, banks and small finance banks which extend MFI loans, have been reporting challenges on this portfolio, and the regulator has also flagged the same.
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Over-leveraging among the borrowers is being flagged as a key aspect, impacting asset quality.
The report by Crif High Mark, a credit information company said, there was 17.2 per cent increase in the borrowers having more than five active loan accounts in June when compared with the year-ago period, with highest growth seen in West Bengal and Karnataka.
Nearly half of the rise in stress on an incremental basis when compared to the year-ago period came from borrowers who have five or more active loans, the company said.
There was 31.2 per cent QoQ drop in the amount disbursed in the first quarter of FY25 at Rs 79,000 crore while the number of loans disbursed fell 32.1 per cent to 1.62 crore.
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On the asset quality front, all the three classifications -- overdue for up to 30 days, 31-180 days and over 180 days -- showed an uptick, with the largest stress being in the 31-180 days overdue advances where 2.7 per cent of the loans were unpaid as of June as against 2.1 per cent in March.
The company said Kerala, Tamil Nadu, Odisha and Rajasthan showed the highest stress on the asset quality front, while West Bengal, Karnataka and Maharashtra witnessed the least increase.
Tamil Nadu and Uttar Pradesh alone accounted for over a third of the incremental delinquency during the quarter when compared with the March quarter, it said.
Among the lender types, non-banking finance companies showed a 2.7 per cent growth in portfolio, while banks showed the steepest decline at nearly 5 per cent.
Lenders seem to be preferring higher ticket size loans as the over Rs 50,000 amount loans showed the strongest growth.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)