Microfinance asset quality improves further as loans at risk fall to 2.3% in June: CRIF

Kolkata: Microfinance asset quality stress eased further in June, with the share of portfolio at risk falling to 2.3% from 2.6% three months prior, data from CRIF High Mark showed. The ratio was 7.1% a year earlier and 7.6% as of end-March 2025.

The data captures loans that remained unpaid for up to 180 days from their due date. Loans that remained unpaid beyond 180 days are not captured.

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"Overall risk management remains strong, supported by the effect of guardrails," the credit information bureau said in its latest quarterly report, released Tuesday.

Loan originations moderated during the quarter due to seasonal factors, it said.

The reduction in stressed loans was helped by aggressive write-offs of bad loans by lenders across the board, people aware of the matter said.

The sector has consolidated towards better portfolio performance and larger loan sizes, the report said. Average ticket size rose to Rs 62,100 at the end of June from Rs 53,600 a year earlier as lenders continued to focus on existing borrowers with good repayment records.

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Bihar and Jharkhand led the shift. The share of loan originations above Rs 1 lakh in Bihar rose to 16% from 9.8%, while Jharkhand's share increased to 10.3% from 7.7% over the one-year period. Overall, Tamil Nadu had the highest share of loan originations above Rs 1 lakh, at 30%.

Microfinance disbursements stood at Rs 61,100 crore in the first quarter, down 20% from the previous quarter due to seasonal factors, the report said. Non-banking financial companies-microfinance institutions (NBFC-MFIs) accounted for 45% of origination value.

The portfolio share of NBFC-MFIs rose to 44% in June from 38.8% a year earlier.