Share of high-value micro loans rise: Report

Kolkata: The share of high-value microfinance loans of more than Rs 75,000 given to single borrowers rose to 41% in the first quarter of this fiscal year from 28% a year earlier, according to a joint report by Equifax India and Small Industries Development Bank of India.

The report published Thursday indicates that micro lenders are focusing their capital on existing borrowers with established credit histories who can safely absorb larger loans.

“The data reveals a shift in lending strategy, moving away from traditional small-ticket loans toward higher-value disbursements,” said the report.


The industry’s average loan size increased to Rs 62,962 in the first quarter from Rs 54,681 a year prior.

“The microfinance industry seems to be going through an important phase of recalibration, where growth is increasingly being balanced with the quality and sustainability of the portfolio,” Equifax India managing director Wilfred Sigler was quoted as saying in a press statement issued by the company.

The sector’s asset quality strengthened with 30-day-plus delinquency falling to 1.89% at the end of June from 6.08% a year earlier.