MFI portfolio drops 9% YoY to Rs 3.34 trillion as of April 2026: Equifax

The total microfinance portfolio outstanding stood at ₹3.34 trillion as of April 30, 2026, reflecting a 9 per cent year-on-year (Y-o-Y) decline, while active loans moderated to 10.28 crore, according to an Equifax report. Disbursement activity also remained measured, with industry-wide disbursement volumes declining 18 per cent year-on-year and disbursement value reducing 4 per cent during the period from May 2025 to April 2026.

 

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However, there was a notable improvement in asset quality across the industry, with the 30+ days past due (DPD) delinquency rate declining sharply to 2.5 per cent in April 2026 from 6.4 per cent in April 2025. The improvement was observed consistently across lender categories, indicating stronger underwriting practices, tighter credit monitoring and a sector-wide focus on sustainable lending.

“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. The sharp improvement in delinquency levels reflects stronger credit frameworks and a more calibrated risk environment across the ecosystem,” said the head of strategy and interim managing director (MD) at Equifax Credit Information.

Among lender segments, non-banking financial companies (NBFCs) reported the lowest delinquency levels across all overdue buckets, reinforcing their focus on prudent underwriting and portfolio monitoring. NBFCs and NBFC-microfinance institutions (MFIs) also witnessed a gradual increase in market share across both disbursements and portfolio outstanding during the year.

The report further noted that the top five states contributed 57 per cent of the industry’s portfolio outstanding, underlining continued geographic concentration within the sector. 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.