Microfinance loan book posts sequential uptick in May, says CRIF

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

The microfinance industry's loan portfolio recorded a sequential increase in May 2026, marking an improvement over the broadly flat trend seen during the previous quarter, even as asset quality continued to improve and fresh loan disbursements remained steady.

 

According to CRIF High Mark's latest MicroLend Lite report, the industry's gross loan portfolio (GLP) rose 0.7 per cent month on month to ₹333.5 trillion in May from ₹331.2 trillion in April, reversing the muted movement seen over the previous two months. The portfolio had stood at ₹331 trillion in March. The report said the portfolio remained broadly stable while showing signs of gradual expansion. The gross loan portfolio increased by around 0.8 per cent over the March-May period. At the same time, the number of active loans rose to 10.7 crore from 10.6 crore in April.

 

 

The improvement in the portfolio was accompanied by further moderation in delinquencies. Portfolio at Risk (PAR) for 1-30 days declined to 0.6 per cent in May from 0.8 per cent in April, while PAR for 91-180 days eased to 0.9 per cent from 1.1 per cent. Overall PAR for 1-180 days improved to 2.2 per cent from 2.5 per cent a month earlier. However, PAR for 31-90 days edged up marginally to 0.7 per cent from 0.6 per cent.

 

The report attributed the improvement in early-stage delinquencies primarily to banks, while the decline in 91-180-day delinquencies was broad-based across lender categories. The slight increase in PAR for 31-90 days was driven by NBFC-MFIs.

 

NBFC-MFIs continued to account for the largest share of the industry's loan book at 43.4 per cent, followed by banks at 26.2 per cent, NBFCs at 13.3 per cent and small finance banks at 15.6 per cent.

 

Among states, Bihar and Uttar Pradesh led portfolio growth during the month, with Bihar's loan portfolio expanding 1.2 per cent month on month to ₹54,000 crore and Uttar Pradesh posting 1.3 per cent growth to ₹40,600 crore. Tamil Nadu was the only state among the top three to register a decline, with its portfolio contracting 0.4 per cent.

 

The report noted that West Bengal, Madhya Pradesh and Rajasthan continued to report delinquency levels above the pan-India average.

 

Fresh loan originations remained largely unchanged during the month. Total disbursements stood at ₹20,584 crore in May, compared with ₹20,325 crore in April, while the number of loans disbursed increased marginally to 33.1 lakh from 32.7 lakh. Average ticket size declined to ₹61,000 from ₹62,300 in April, indicating stable lending activity despite cautious underwriting.