 "The limit of loans under the Pradhan Mantri Mudra Yojana (PMMY) was doubled to Rs 20 lakh recently, inserting a new category—Tarun Plus. Launched 10 years ago, the scheme intended to provide microfinance to small entrepreneurs. However, the number of")
The asset quality of the microfinance portfolio, measured by Portfolio at Risk (PAR) 31–180, deteriorated to 6.2 per cent at the end of Q4FY25, compared to 2 per cent at the end of Q4FY24. Loan disbursals also dropped to ₹1.12 trillion in FY25 from ₹1.50 trillion, according to the Microfinance Industry Network (MFIN). The credit quality decline was attributed to multiple factors such as heatwaves, external incitement, overleveraging concerns, and the Karnataka regulatory issue.
Non-performing assets (NPAs) in the microfinance sector rose to nearly ₹55,000 crore—equivalent to 14.8 per cent of gross loans—by March 2025. The portfolio segment that could
