Microfinance GLP Dips 16.5 Pc As Asset Quality Improves
“As institutions leverage data-driven insights to assess borrower behaviour, we expect the next few quarters to see more calibrated expansion backed by stronger asset quality”: Sachin Seth, Chairman – CRIF High Mark Credit Bureau (CIC)
CHENNAI: The microfinance industry’s Gross Loan Portfolio at the end of September quarter recorded a 16.5 per cent year-on-year and 3.8 per cent quarter-on-quarter decline. While credit growth moderated, asset health improved in micro loans.
As of September 2025, the industry’s GLP stood at Rs 3.46 lakh crore, reflecting a 16.5 per cent year-on-year and 3.8 per cent quarter-on-quarter decline. However, the value of loans disbursed rose 6.5 per cent QoQ, indicating a shift toward higher ticket sizes and lending to seasoned borrowers.
Active loans declined 19.3 per cent YoY, and 6.3 per cent QoQ. Improvement in portfolio quality was evident, with PAR 1–180 declining to 5.99 per cent, and early delinquencies (PAR 1–30 and PAR 31–90) also showed signs of easing. However, stress in later-stage PAR 180+ (including write-offs) surged to 15.32 per cent, up 9.71 per cent YoY and 2.89 per cent QoQ, reflecting legacy stress and ongoing portfolio recalibration.
Borrower exposure to up to three lenders rose from 83.1 per cent to 91.2 per cent between Sep’24 and Sep’25, reflecting adherence to the guardrails cap.
“As institutions leverage data-driven insights to assess borrower behaviour, we expect the next few quarters to see more calibrated expansion backed by stronger asset quality,” Sachin Seth, Chairman – CRIF High Mark Credit Bureau (CIC) Regional Managing Director, CRIF India & South Asia.
