India’s microfinance sector has bounced back strongly, with loan portfolios expanding sharply in the March quarter after 11 quarters of contraction and write-offs. Alongside the recovery in lending, delinquency rates have also declined, easing worries from the earlier stress cycle. The report suggests this improved momentum is likely to continue in coming quarters.
Microfinance is regaining momentum after 11 quarters of contraction. In the January–March period, the sector returned to growth as market size expanded and loan portfolios rose 5.3%. Delinquency rates declined across lender categories following earlier write-offs, signaling a more stable recovery and improving credit health for borrowers and lenders alike.
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