Mumbai, June 10: CRIF High Mark, one of India’s credit bureaus, has released the latest edition of MicroLend Lite, providing a snapshot of key trends in India’s microfinance sector as of April 2026.
The microfinance industry is slowly stabilizing after a period of tighter risk controls. Although the number of active loans has decreased, the overall portfolio remains strong. This is due to better repayment habits, improved collections, and stricter lending practices by institutions.
India’s microfinance sector plays a critical role in advancing financial inclusion by extending formal credit access to millions of underserved households, women entrepreneurs, and small business owners across rural and semi-urban markets. Against a backdrop of evolving borrower needs and a maturing lending ecosystem, the latest data points to growing portfolio stability, improving asset quality, and a sustained shift towards responsible lending practices.
Key Highlights:
Portfolio Stability Amid Continued Consolidation
India’s microfinance portfolio outstanding stood at ₹331.2 thousand crore in April 2026, registering a marginal month-on-month increase of 0.1%. Active loans declined by 1.2% over the same period, indicating an ongoing shift towards higher ticket-size lending and portfolio consolidation.
NBFC-MFIs maintained their dominant position in the sector, accounting for 43.6% of the total portfolio, followed by Banks (26.3%), Small Finance Banks (15.6%), and NBFCs (13.2%).
Asset Quality Shows Sustained Improvement
The report notes continued improvement in delinquency levels across all the lender categories in the 31–180 DPD buckets,
Overall PAR 1–180 improved from2.6% in March 2026 to 2.5% in April 2026. Delinquencies in the mid- and later-stage buckets also declined, with:
- PAR 31–90 reducing from 0.8% to 0.6%
- PAR 91–180 improving from 1.2% to 1.1%
PAR 1–30 witnessed a marginal increase from 0.6% to 0.8%, reflecting seasonal repayment variations, though overall portfolio performance remained healthy.
Regional Trends
The top 10 states accounted for 82.8% of the national microfinance portfolio as of April 2026.
Bihar remained the largest microfinance market with a portfolio of ₹53.3 thousand crore, followed by Uttar Pradesh (₹40.0 thousand crore) and Tamil Nadu (₹38.6 thousand crore).
Active loans declined across all top 10 states, led by Bihar (-1.6% month-on-month), reinforcing the industry’s ongoing focus on portfolio quality and disciplined borrower acquisition.
Among key states:
- Karnataka recorded improvement in both early and mid-stage delinquencies.
- Odisha continued to maintain one of the strongest portfolio quality profiles among major markets.
- Maharashtra, Tamil Nadu and West Bengal witnessed a marginal contraction in portfolio outstanding during the month.
All top-10 states registered improvements in PAR 31–180 levels, underscoring broad-based strengthening in credit performance.
Origination Trends
Microfinance originations moderated during April 2026, with both disbursal value and loan volumes declining on a month-on-month basis, largely due to seasonal factors. However, the average ticket size remained stable at approximately ₹62,000, reflecting sustained demand for higher-value loans and the industry’s calibrated lending approach.
Industry Outlook
The latest Microlend Lite findings indicate that the microfinance sector is steadily stabilizing, with consistent portfolio growth, better loan quality, and careful lending practices. Lower delinquencies and stable loan sizes indicate improved borrower quality and steady, disciplined growth.