Chapter 2 - Section 2.2 - SubSection 2.2.1Key Performance Highlights

As of March 31, 2025, the total number of loan accounts serviced by all micro-lenders stood at 1,399 lakhs. The NBFC-MFIs maintained the largest market share with 539 lakh loan accounts, representing 39%, followed by Banks with 466 lakh loan accounts (33%). Small Finance Banks (SFBs) serviced 216 lakh loan accounts (15%), NBFCs accounted for 163 lakh loan accounts (12%), and Other lenders comprised 15 lakh loan accounts (1%). On a year-on-year basis, only the ‘Others’ category registered positive growth in loan accounts at 34%, whereas all other microlender categories experienced declines: NBFC-MFIs (-19%), SFBs (-12%), Banks (-11%), and NBFCs (-4%).

Read More

Market Share of Micro-Lenders in terms of Loans Accounts (in %)

Growth (in %) in Number of Loan Accounts across micro-lenders (in lakhs)

2.1.1 Key Performance Highlights
Figure 2.1 Market Share of Micro-Lenders in terms of Loan Accounts (in %)

As of March 31, 2025, the total number of loan accounts serviced by all micro-lenders stood at 1,399 lakhs. The NBFC-MFIs maintained the largest market share with 539 lakh loan accounts, representing 39%, followed by Banks with 466 lakh loan accounts (33%). Small Finance Banks (SFBs) serviced 216 lakh loan accounts (15%), NBFCs accounted for 163 lakh loan accounts (12%), and Other lenders comprised 15 lakh loan accounts (1%). On a year-on-year basis, only the ‘Others’ category registered positive growth in loan accounts at 34%, whereas all other microlender categories experienced declines: NBFC-MFIs (-19%), SFBs (-12%), Banks (-11%), and NBFCs (-4%).

Figure 2.2: Y-o-Y Growth (in %) in Number of Loan Accounts across micro-lenders (in lakhs)

The contraction in loan accounts during FY 2024-25 reflected a deliberate recalibration by micro-lenders facing elevated credit risks within the microfinance industry. After an extended period of accelerated growth, rising delinquency rates signalled emerging vulnerabilities, prompting the micro lenders to shift towards more prudent, quality-centric lending practices. This transition resulted in both a reduction in the number of disbursed loans and a decrease in total outstanding loan balances, as lenders prioritized risk management and the long-term stability of their portfolios.

This change was also prompted by the guardrails issued by SROs like Sa-Dhan for reducing the overleverage and bringing the industry back to a better shape. As a result of this, there has been an improvement in terms of the number of micro-lenders for a borrower, which can be observed in Table 2.1.

Table 2.1 Distribution of Unique Active Borrowers across the number of micro-lenders as of March 2025 and March 2024
Active Lender Associations Unique Active Borrowers (in %) as on March 2025 Unique Active Borrowers (in %) as on March 2024
<=2 88.3% 85.8%
3 7.2% 7.8%
4 2.9% 3.6%
>=5 1.6% 2.8%