Chapter 2 - Section 2.3 - SubSection 2.3.2State/UT-wiseLoanOutstanding(in ₹Cr.)

Table 2.4 outlines the loan outstanding across States and Union Territories. Year-on-year analysis reveals that 32 States/UTs experienced a decline in loan outstanding during the period. Only four states with relatively smaller microfinance footprints—Arunachal Pradesh (29%), Nagaland (24%), Telangana (14%), and Meghalaya (8%)—recorded positive growth.

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India Country

Loan Outstanding (in ₹ Cr.) of all micro-lenders across States/UTs - March 2025 and March 2024 (in descending order of Loan Outstanding)

March 2023 742Lakh Unique Active Borrowers in Total

March 2024 867 Lakh Unique Active Borrowers in Total

2.3.2 State/UT-wiseLoanOutstanding(in₹Cr.)

Table 2.4 outlines the loan outstanding across States and Union Territories. Year-on-year analysis reveals that 32 States/UTs experienced a decline in loan outstanding during the period. Only four states with relatively smaller microfinance footprints—Arunachal Pradesh (29%), Nagaland (24%), Telangana (14%), and Meghalaya (8%)—recorded positive growth.

In contrast, major states with significant loan outstanding, including Tamil Nadu (-20%), Karnataka (-17%), Bihar (-12%), Uttar Pradesh (-10%), and West Bengal (-9%), witnessed substantial declines. The widespread stress in the microfinance industry, primarily driven by credit overexposure and related recovery challenges, led to a reduction in fresh credit disbursements and, consequently, a decrease in loan outstanding

Furthermore, the state-level regulatory interventions— such as the Karnataka Micro Loan and Small Loan (Prevention of Coercive Actions) Bill, 2025, created some apprehension among the lenders regarding potential operational constraints and increased compliance requirements.

Table 2.4 Loan Outstanding (in ₹ Cr.) of all micro-lenders across States/UTs - March 2025 and March 2024 (in descending order of Loan Outstanding)
S. No State/UT March 2025
(in ₹ Cr.)
March 2024
(in ₹ Cr.)
Y-o-Y Growth
(in %)
1 Bihar 57,712 65,487 -12%
2 Tamil Nadu 46,833 58,239 -20%
3 Uttar Pradesh 41,774 46,304 -10%
4 West Bengal 36,730 40,328 -9%
5 Karnataka 35,351 42,560 -17%
6 Maharashtra 29,596 33,304 -11%
7 Madhya Pradesh 21,653 24,870 -13%
8 Odisha 20,719 25,615 -19%
9 Rajasthan 14,930 18,144 -18%
10 Kerala 11,273 14,159 -20%
11 Jharkhand 11,149 13,118 -15%
12 Gujarat 10,913 13,107 -17%
13 Andhra Pradesh 7,322 8,346 -12%
14 Assam 7,082 7,410 -4%
15 Chhattisgarh 6,553 7,493 -11%
16 Telangana 5,717 5,015 14%
17 Haryana 5,138 6,236 -18%
18 Punjab 4,372 5,684 -23%
19 Tripura 2,196 2,314 -6%
20 Uttarakhand 1,749 2,077 -16%
21 Puducherry 671 842 -20%
22 Delhi 616 795 -23%
23 Himachal Pradesh 160 182 -12%
24 Goa 155 195 -21%
25 Meghalaya 139 129 8%
26 Sikkim 131 133 -1%
27 Mizoram 111 121 -9%
28 Arunachal Pradesh 105 81 29%
29 Others 90 172 -48%
30 Jammu & Kashmir 80 83 -4%
31 Manipur 80 104 -23%
32 Nagaland 68 55 24%
33 Chandigarh 46 54 -15%
34 Andaman and Nicobar Islands 18 20 -9%
35 Dadra and Nagar Haveli 14 16 -12%
36 Daman and Diu 7 9 -20%
37 Lakshadweep 0.02 0.03 -39%
Industry 3,81,225 4,42,700 -14%
Figure 2.4: Market Share of micro-lenders in terms of Loan Outstanding (in %)

In terms of market share of loan outstanding, NBFC-MFIs remained the dominant providers of microcredit, accounting for 39% of the total market. Banks held the second-largest share at 32%, followed by Small Finance Banks (SFBs) with 16%, NBFCs with 12%, and Others comprising the remaining 1%.