New Delhi, May 27 (SocialNews.XYZ) India’s microfinance sector witnessed a sharp improvement in asset quality, with the 30+ days past due (DPD) delinquency rate declining by 60 per cent, a report said on Wednesday.
A report by Equifax showed that the 30+ days past due (DPD) delinquency rate stood at 2.5 per cent in April from 6.4 per cent in April 2025.
The improvement was observed across lender categories, reflecting stronger underwriting practices, tighter credit monitoring and a sector-wide emphasis on sustainable lending, it said.
"The latest trends suggest that the microfinance sector is undergoing a structural transition toward more disciplined and sustainable growth. Lenders are increasingly balancing growth ambitions with portfolio quality and long-term resilience," said Head of strategy and Interim MD for Equifax Credit Information.
The report added that improvement in delinquency levels points to stronger credit frameworks and a more calibrated risk environment across the ecosystem.
At the same time, the industry’s total portfolio outstanding stood at Rs 3.34 lakh crore as of April 2026, a 9 per cent year-on-year decline, while active loans moderated to 10.28 crore.
Moreover, disbursement activity remained measured during the period, with industry-wide disbursement volumes declining 18 per cent year-on-year and disbursement value falling 4 per cent between May 2025 and April 2026.
Among lender segments, NBFCs reported the lowest delinquency levels across all overdue buckets, reinforcing their focus on prudent underwriting and portfolio monitoring.
In addition, NBFCs and NBFC-MFIs witnessed a gradual increase in market share across both disbursements and portfolio outstanding during the year.
The top five states contributed 57 per cent of the industry’s portfolio outstanding, underlining continued geographic concentration within the sector, according to the report.
Geographica, Bihar, Uttar Pradesh, Rajasthan and Jharkhand emerged as key growth markets, recording positive year-on-year growth in disbursements despite the broader moderation in lending activity.
Source: IANS
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