Chapter 2 - Section 2.3 - SubSection 2.3.1Loan Outstanding (in ₹ Cr.)2

At the close of FY 2024-25, the total microcredit loan outstanding across all micro-lenders was ₹ 3,81,225 Cr., reflecting a year-on-year decline of 14%. Most of the micro-lenders reported negative growth during the reporting period, with the Small Finance Banks (SFBs) experiencing the steepest decline at 20%, followed by NBFC-MFIs at 18% and Banks at 10%. Conversely, non-NBFC-MFIs and NBFCs reported positive growth of 34% and 0.2%, respectively. The overall reduction in loan outstanding was driven not by a decrease in demand but by a deliberate attempt by the lenders due to significant repayment stress and a strategic shift toward cautious risk management. This included measures such as restrictions on multiple lending, enhanced credit assessments, and liquidity crunch during FY 2024-25.

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Loan Outstanding (in ₹ Cr.) across micro-lenders

2.3.1 Loan Outstanding (in ₹ Cr.)2
Figure 2.3: Loan Outstanding (in ₹ Cr.) across micro-lenders

2 Off-balance sheet (managed, assigned, and business correspondent) loan outstanding of NBFC-MFIs, NBFCs, and Non-Profit MFIs is included under the Bank’s category

At the close of FY 2024-25, the total microcredit loan outstanding across all micro-lenders was ₹3,81,225 Cr., reflecting a year-on-year decline of 14%. Most of the micro-lenders reported negative growth during the reporting period, with the Small Finance Banks (SFBs) experiencing the steepest decline at 20%, followed by NBFC-MFIs at 18% and Banks at 10%. Conversely, non-NBFC-MFIs and NBFCs reported positive growth of 34% and 0.2%, respectively. The overall reduction in loan outstanding was driven not by a decrease in demand but by a deliberate attempt by the lenders due to significant repayment stress and a strategic shift toward cautious risk management. This included measures such as restrictions on multiple lending, enhanced credit assessments, and liquidity crunch during FY 2024-25.