The microfinance industry shrank in the second quarter of FY25 as loan delinquency rates —- where instalments are overdue by 30 to 180 days — reached 4.3% in September 2024 from 2% just a year ago.

The microfinance portfolio was valued at ₹4.1 lakh crore in September 2024, a 4.3% decline compared to June and an annual growth of 7.6%. The CRIF Microlend report, which examines small-ticket loans at the end of Q2 FY25, indicates that the percentage of borrowers with three or more active lender associations has declined across states, as has portfolio exposure to such borrowers.

Bihar, Tamil Nadu, Uttar Pradesh, and Odisha accounted for 62% of the incremental delinquencies.

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