Microfinance begins to recover, but it’s a long walk to full health

After two years of credit stress, policy reforms and write-offs, India’s microfinance sector is taking tentative steps to recovery.

- Subhana Shaikh [e-mail]

Bad loan ratios moderated and loan collections improved in the September quarter due to the return of borrower discipline, bankers said. However, profitability remains under pressure and growth still appears far. A key reason: Uneven recovery across states and lenders.