Archive · 31 Jan 2026
Karnataka Leads India's Microfinance Recovery with Rs 23,743 Crore Portfolio
Karnataka is leading India's microfinance recovery with a strong portfolio of Rs 23,743 crore.
The state's performance has been validated by research reports from Equifax India and India Ratings.
The Indian government's Budget 2025 has also supported this growth by doubling the credit guarantee limits to Rs 10 crore.
Karnataka's microfinance sector has shown significant improvement, with delinquency rates dropping and profitability expected to increase.
The state's top districts in terms of portfolio are Belagavi, Mysuru, and Bengaluru Urban.
The microfinance sector in India has a lot of growth potential, with only 30% of the addressable market currently penetrated.
Karnataka's resilience and the broader regulatory support position the sector to play a vital role in inclusive economic growth.
Karnataka's microfinance portfolio stands at Rs 23,743 crore, leading India's recovery in the sector.
Budget 2025 doubled the credit guarantee limits to Rs 10 crore, supporting the growth of microfinance institutions.
India Ratings upgraded the microfinance sector outlook from 'deteriorating' to 'neutral', projecting significant improvements in credit costs and profitability.
Karnataka's 30+ delinquency rate improved to 5.60% in November 2025, with Belagavi, Mysuru, and Bengaluru Urban leading in portfolio size.
The microfinance sector in India has significant growth potential, with only 30% of the addressable market currently penetrated, and a national portfolio of Rs 3 lakh crore.
- Who
- Karnataka, Association of Karnataka Microfinance Institutions (AKMI), Equifax India, India Ratings
- What
- Karnataka's microfinance sector recovery and growth
- When
- Budget 2025, Q3 FY26, November 2025
- Where
- Karnataka, India
- Why
- To reclaim the microfinance sector's role as an engine of inclusive economic growth
- Karnataka's Microfinance Portfolio
- Rs 23,743 crore
- Budget 2025 Credit Guarantee Limit
- Rs 10 crore
- Projected Credit Costs (FY27)
- 4.0%
- Projected Profitability (PAT-to-AUM) (FY27)
- 2.7%
- Karnataka's 30+ Delinquency Rate (November 2025)
- 5.60%
- Top Districts by Portfolio
- Belagavi (Rs 1,788 cr), Mysuru (Rs 1,707 cr), Bengaluru Urban (Rs 1,536 cr)
- Microfinance Penetration in India
- 30% of addressable market
- National Microfinance Portfolio
- Rs 3 lakh crore