NBFCs, NBFC-MFIs contribute 86 pc of microfinance client base: Report

Kolkata, Oct 11 (PTI) NBFCs and NBFC-MFIs contribute to 86 per cent of the microfinance client base and 84 per cent of the outstanding portfolio, according to a report.

The report, prepared jointly by Sa-Dhan, a self-regulatory organisation, and the National Bank for Agriculture and Rural Development (NABARD), said that the total active client base of the MFIs stood at 8.28 crore and loan outstanding at Rs 3,81,225 crore at the end of the 2024-25 fiscal.

Other entities which extend microloans are banks and small finance banks.

The top five states for the micro-lending business are Bihar, Tamil Nadu, Uttar Pradesh, West Bengal and Karnataka, it said.

NABARD chairman K V Shaji said that MFIs have emerged as the cornerstone of India's socio-economic transformation by fostering financial inclusion.

"Millions have been able to access timely and collateral-free credit, enabling them to build sustainable livelihoods," he said.

Sa-Dhan executive director and CEO Jiji Mammen said the issue of over-leveraging of credit had been causing stress in the sector.

"Sensing this, the SROs (self-regulatory organisations) and industry leaders have come up with additional guardrails, which brought restrictions and controls in lending. These controls have led to negative growth of the sector, which is expected to be better in the current financial year," he said. PTI DC BDC