Microfinance borrower indebtedness declining

Even as the ratio of stressed assets in the microfinance sector has increased in the second half of the financial year 2025 (H2FY25), the borrower indebtedness is showing a declining trend at 11.7 per cent, according to the RBI's Financial Stability Report.

- AATHIRA VARIER

The stressed assets in the segment increased, with 31-180 days past due (dpd) rising to 6.2 per cent in March 2025 from 4.3 per cent in September 2024.

The banking sector also saw an increase in stress in their microfinance portfolio with 31-180 dpd rising to 6.5 per cent from 4.7 per cent.