In February 2025, Gurugram(Haryana) based Microfinance Institution Network (MFIN) India, an umbrella body of the Microfinance Institutions (MFIs), released 52nd edition of Micrometer as on 31 December 2025 report. The report revealed that disbursement of microfinance loans has decreased 35.8% to Rs 22,091 crore during the 3rd Quarter (Q3: October-December) of Financial Year 2024-25 (FY25) compared with the year-ago period.
- The Gross Loan Portfolio (GLP) of the sector as of December 31, 2024, stood at Rs 3,85,348 crore.
- The report showed that the total loan portfolio in the micro-finance sector has decreased by 3.5% Year-on-Year (Y-o-Y) to Rs 3.85 trillion during Q3FY25.
- Also, the number of new loans disbursed registered a negative growth of 29.02%.
Key Findings:
i.As on December 31 2024, the Assets Under Management (AUM) of the MFIs stood at Rs 1,42,695 crore, reflecting a decrease of 0.1% against Q3FY24 and 6.5% on a sequential basis.
ii.As per the report, the average loan amount disbursed per account during Q3FY25 was Rs 51,691 crore, showing an increase of 15.2% compared to the same quarter of FY24.
- Also, the number of loan accounts for the sector decreased from 146 million (in Q3FY24) to 139 million (in Q3FY25).
iii.The report revealed that Portfolio At Risk (PAR), defined as unpaid loans of more than 30 days, has decreased to 8.8% as on December 31, 2024, as against 3.5% registered with the year ago-period.
- MFIN data further showed that PAR has increased from 2% (in Q3FY24) to 6.4% (Q3FY25).
iv.The report showed that Non-Banking Finance Companies working as Microfinance Institutions (NBFC-MFIs) received Rs 12, 921 crore in debt funding quarter under review, decrease from 40% Year-on-Year (Y-o-Y).
- NBFC-MFIs received maximum funding from banks contributed 79% of the total borrowing, followed by External Commercial Borrowing (ECB) (8%) and all India Financial Institutions (FIs) (4.3%).
Other Key Points:
i.As per the report, the loan portfolio of NBFC-MFIs decreased by 3.8% Y-o-Y, banks (5.5%) and Small Finance Banks (SFBs) (11%).
- In contrast to the above Financial Institutions(FI), NBFCs registered a growth of 22.2% in loans.
ii.The report highlighted that the loan amount disbursed has reduced by 20% Y-o-Y, from Rs 78,584 (in Q3FY24) to Rs 62,817 crore (in Q3FY25).
iii.The report showed that in terms of geographical coverage, East and North-East and South regions cumulatively account 63% of the total microfinance portfolio.
iv.The average loan size has increased to Rs 53,350 (in December 2024) compared to Rs 47, 374 registered in December 2023 and Rs 50,487 in September 2024.
Recent Related News:
In January 2024, the Reserve Bank of India (RBI) has released the Report on Trend and Progress of Banking in India 2023-24 under Section 36(2) of the Banking Regulation Act, 1949.
- The profitability of the commercial banks in India increased for the 6th consecutive year in 2023-2024. The banks witnessed a Return on Assets (RoA) of 1.4% and a Return on Equity (RoE) of 14.6% in Financial Year (FY) 2024 with profitability remaining robust in the first half of FY25.
About Microfinance Institution Network (MFIN) India:
Chief Executive Officer (CEO) and Director- Dr. Alok Misra
Headquarters- Gurugram, Haryana
Established- 2009
