RURAL DEMAND LIFTS MICROFINANCE SECTOR AS LENDERS SEE SIGNS OF STABILITY

NBFC-MFIs continue to play a critical role in underserved states, including Bihar, West Bengal and Uttar Pradesh, where formal banking access remains limited.

- TBG NETWORK

India’s microfinance industry is witnessing a renewed upswing, supported by rising rural demand, improved repayment behaviour and early signs of asset-quality stabilisation, according to experts and lenders.

Fresh data from Sa-Dhan, an RBI-appointed Self-Regulatory Organisation (SRO) for Microfinance Institutions, shows that rural regions now account for nearly 80 per cent of the microfinance portfolios of non-bank lenders, the highest share in over a decade.

Small entrepreneurs, farmers, and women-led microenterprises are driving this expansion, with most loans channelled into income-generating activities. NBFC-MFIs continue to play a critical role in underserved states, including Bihar, West Bengal and Uttar Pradesh, where formal banking access remains limited.