Microfinance portfolio shrinks 14% as asset quality challenges persist: Report

The microfinance sector experienced a 14 percent loan portfolio contraction. Asset quality remains a concern. Delinquencies are rising, signaling recovery difficulties. Lenders reduced exposure in Tamil Nadu and Karnataka. Active loans decreased. New disbursements declined year-on-year. The industry now favors higher-value loans. Crif High Mark anticipates long-term sustainability. Lenders prioritize resilience and stability for inclusive growth.