Microfinance Pulse

The 25th edition of the MFI Pulse Report captures data up to September 30, 2025. The microfinance industry’s total portfolio outstanding as of end-September 2025 stands at ₹2.90 lakh crore, supporting over 9 crore active loans and 5.5 crore unique borrowers. The industry continues to experience a phase of consolidation, with the portfolio witnessing a contraction of 22% YoY. NBFC-MFIs remain the dominant contributor to the portfolio, accounting for the largest share among lender types.

The overall asset quality has shown a very gradual improvement, the 30–179 days past due delinquency has declined sequentially to 5.3% from the previous quarter, even as the harder bucket (180+ days past due) has risen sharply, indicating persistent recovery challenges.

The industry remains geographically concentrated, with the top 10 states contributing the bulk of the portfolio. Aspirational districts account for about 15% of the total microfinance book, though delinquency trends in these regions have worsened compared to last year.

This edition also highlights a growing trend toward higher ticket sizes, with loans above ₹1 lakh gaining share, reflecting lenders’ preference for increasing exposure to existing borrowers with good repayment records rather than onboarding new-to-credit customers. Additionally, multi-lender exposure continues to pose a risk, as delinquency rates are significantly higher for borrowers associated with three or more lenders.