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Microfin stress continues to affect loan originations

Business Standard

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April 02, 2025

Rising delinquencies, over-leverage strain the sector

- SUBRATA PANDA

Microfin stress continues to affect loan originations

The persisting stress in the microfinance sector continued to weigh on loan originations in the December quarter (Q3FY25), with a 35 percent year-on-year (Y-O-Y) drop in value and 42 percent in volume, according to CRIF data.

"The contraction likely arises from rising delinquencies, borrower over-leverage across lenders, and collection inefficiencies, straining asset quality and prompting cautious growth," the report said.

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