Archive · 4 Sep 2025
MFIs' Disbursements Drop 24% YoY, Portfolio Quality Improves
Microfinance institutions (MFIs) gave out 24% less money in the quarter ending June compared to last year, totaling ₹22,805 crore.
The total amount of money managed by MFIs also decreased.
There are fewer people using these services.
Despite these drops, the quality of the loans is improving.
The head of MFIN hopes for more funding to support the sector and maintain the improving loan quality.
This is important for financial services to continue improving.
MFIs' disbursements dropped 24% year-on-year to ₹22,805 crore in Q1.
Overall assets under management decreased by 16% year-on-year to ₹1.34 lakh crore.
The number of clients decreased to 3.8 crore in Q1 from 4.5 crore.
Bihar has the largest portfolio outstanding.
Portfolio at risk shows better trends in the 31-60 days bucket.
- Who
- Microfinance Institutions (MFIs)
- What
- Disbursements fell 24% year-on-year to ₹22,805 crore in Q1.
- When
- During the quarter ended June.
- Where
- Data from MFIN.
- Why
- The sector needs liquidity to sustain the improvement in credit quality.
- Disbursements (Q1)
- ₹22,805 crore
- Disbursement Change (YoY)
- Down 24%
- Asset Under Management (YoY)
- Down 16% to ₹1.34 lakh crore
- Client Reduction (Q1)
- 3.8 crore (from 4.5 crore)
- Largest State (Portfolio)
- Bihar
- Highest Avg. Loan (TN)
- ₹31,363