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Jefferies flags weak MFI disbursements; says asset quality recovery could take 1–2 quarters
By Markets Desk Published on June 6, 2025, 08:22 IST
Jefferies has flagged concerns over recent trends in the microfinance (MFI) sector, noting that fourth quarter FY25 disbursements fell 38 percent year-on-year, though they rose 12 percent quarter-on-quarter.
This resulted in a 3 percent quarter-on-quarter and 14 percent year-on-year fall in assets under management.
Overdue loans (31–180 days) showed marginal improvement, declining from 6.4 percent in December to 6.2 percent in March. However, Jefferies believes asset quality normalisation could take one to two more quarters.
The sector is also navigating new MFIN 2.0 norms, with some risks from state elections.
Jefferies noted that Spandana, Fusion, and CreditAccess Grameen have a higher share of customers with four or more loans, while Bandhan Bank could fare better in this environment.
Disclaimer: The views and target prices mentioned in this article are as stated by Jefferies. They do not represent the opinions or recommendations of this publication. Readers are advised to consult their financial advisors before making any investment decisions.
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