Higher-ticket loans account for 41 pc of microfinance disbursements as delinquency falls
Higher-ticket loans of above Rs 75,000 now account for 41 per cent of microfinance disbursements and industry's over 30 day delinquency fell to 1.89 per cent from 6.08 per cent a year earlier, a report said on Friday.
The report from SIDBI and Equifax Microfinance Pulse said the industry’s portfolio outstanding declined 12 per cent year-on-year to Rs 2.69 lakh crore (as of June 2026) even as disbursements grew 17 per cent to Rs 62,302 crore in April-June 2026.
NBFC-MFIs emerged as the largest lender category with 47 per cent of the industry portfolio, the report said, adding that Bihar has emerged as the largest microfinance market with a 17 per cent share.
The report pointed to a broader shift towards selective lending, larger-ticket exposures and stronger borrower-level credit discipline.
India’s microfinance industry is entering a more measured phase of growth, with lenders prioritising portfolio quality and borrower discipline over aggressive credit expansion.
The lending activity is recovering steadily even as institutions adopt a more selective approach to credit, the report noted.
The shift is increasingly visible in the composition of lending, as the share of entry-level loans below Rs 50,000 continued to decline. Meanwhile, the industry’s average ticket size increased to Rs 62,962 from Rs 54,681 of the previous year.
The shift suggested an evolving Indian microfinance borrower, with evolving aspirations to increase the quality of life.
“Such borrowers are seeking and servicing larger amounts of credit to meet growing household, livelihood and enterprise needs, while lenders are simultaneously directing more capital towards borrowers with established credit histories,” the report noted.
"The decline in delinquency, coupled with the continued shift towards higher ticket sizes, indicates that lenders are becoming more selective in how they deploy capital and assess borrower capacity," said Wilfred Sigler, Managing Director, Equifax India.
"While the contraction in portfolio outstanding reflects a cautious credit environment, the resilience in disbursement value suggests that demand remains present," Sigler added.
The report noted that data-driven underwriting, responsible borrower-level exposure and continued focus on portfolio quality will be critical to supporting sustainable growth in the sector.
