But, sequentially, there was a surge of 12.2 per cent in lending due to seasonal factors.
According to a report by credit bureau CRIF, disbursements rose 12.2 per cent sequentially to ₹71,580 crore, but were down 38 per cent year-on-year (Y-o-Y) from ₹1.15 trillion.
Consequently, the gross loan portfolio shrunk 14 per cent Y-o-Y and 2.6 per cent sequentially to ₹3.81 trillion as of March 2025, compared to ₹4.42 trillion in March 2024, and ₹3.91 trillion in December 2024.
Additionally, new originations have also gone down, with active loans decreasing from 161 million in March 2024 to 140 million in March 2025. The overall active customer count has seen a reduction, down from 87 million to 83 million over the same period, reflecting ongoing industry scenarios.
“This trend reflects a deliberate and calibrated shift by lenders to manage emerging stress, especially in light of regulatory developments and evolving collection practices”, the report highlighted.
State-level data revealed notable contractions in Tamil Nadu and Karnataka portfolios, influenced by anticipated ordinances and increased regulatory intervention on collection practices.
Additionally, the report highlighted that early level delinquency in 1-30 portfolio at risk (PAR) bucket has improved to 1. 4 per cent as of March 2025, compared to 1.8 per cent as of December 2024.
Early-level delinquencies had peaked in September 2024 at 2.1 per cent but have eased since then. Similarly, PAR in the 31-180 bucket surged from 2.1 per cent in March 2024 to 6.4 per cent in December 2024, before easing to 6.2 per cent in March 2025.
Having said that, long-term delinquency, especially in beyond 180 days PAR bucket has deteriorated significantly to 5.1 per cent as of March 2025, compared to 3.7 per cent as of December 2024, reflecting industry wide repayment challenges and delinquency trends.
 "Microfinance")