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Economic Times
3 days ago
- Business
- Economic Times
Microfinance portfolio contracts further to Rs 3.59 lakh cr
Synopsis India's microfinance market experienced a contraction, with the gross loan portfolio declining to Rs 3.59 lakh crore by June 2025. Lenders are prioritizing responsible lending and addressing overleveraging, leading to a decrease in borrowers with multiple lender associations. While early-stage delinquencies improved, later-stage stress remains a concern, indicating a shift towards quality-focused lending. Agencies Representative image Kolkata: The size of India's microfinance market contracted further to Rs 3.59 lakh crore at the end of June, down 5.8% quarter-on-quarter and 17% year-on-year as lenders remained circumspect over growing lending portfolio. The active loan accounts fell to 13.2 crore from 15.93 crore, with the live customer base declining to 8 crore from 8.66 between June 2024 and June 2025. The data were compiled and shared by credit bureau Credit High Mark. The sectoral gross loan portfolio started falling from the first quarter of FY25 after it reached a record high of Rs 4.43 lakh crore at the end of March 2024. It fell to Rs 4.32 lakh crore at the end of June 2024. The moderation aligns with the Reserve Bank of India's push for responsible lending, alongside guardrails from self-regulatory organisations to curb overleveraging, it said. Over the last few quarters, the issue of overlending has also been addressed. Borrowers with four or more active lender associations fell sharply to 10% in June 2025, from 19.2% a year earlier. Over the last 12 months, about 60% of all loans were extended to existing customers with proven repayment histories. Loans above Rs 1 lakh increased in portfolio share to 8.3% as of June 2025 from 4.6% a year back, with 80% of it going to borrowers with a vintage of more than 24 months. The credit bureau said that the portfolio performance has shown green shoots with early- and mid-stage delinquency levels (PAR 31–90) improved from 3.1% in December 2024 and 2.7% in March 2025 to 2.4% in June 2025, signalling strengthening repayment discipline. However, stress in later-stage buckets (PAR 180+ including write-offs) continued to rise, reaching 12.4% in June 2025 from 5.2% in June 2024, underscoring ongoing challenges. The performance highlighted a shift towards quality-focused lending, said CRIF High Mark chairman Sachin Seth. "Lenders prioritised established borrowers, reduced overleveraging, and adjusted ticket sizes in line with risk considerations. The data also highlights early improvements in portfolio quality, with mid-stage delinquencies showing some improvement over the past two quarters,' he said.
Business Mayor
18-05-2025
- Business
- Business Mayor
An integrated view on promoter as well as business to help in assessing lending risk to MSMEs
Credit bureau CRIF has started offering such services. 'Many MSMEs find it challenging to access formal credit due to factors such as informal nature of business and lack of collateral,' said Sachin Seth, regional MD-India and South Asia at CRIF, a global fintech company that specialises in credit bureau and business information. said. 'On the other hand, lenders find it difficult to assess credit risk of these enterprises as this demands a comprehensive assessment of the financial health of the business and the credit risk profile of the business owners.' Credit gap—the difference between the demand for debt and supply of debt—for MSMEs is estimated at Rs 30 lakh crore, according to a report released by Sidbi last week. 'To bridge this gap, CRIF offers a unique solution by integrating the consumer and commercial credit information coupled with CRIF's credit score and CIBR (CRIF India Business Rank). When risk assessment of self-employed or business is involved, lenders can leverage CRIF's credit score combined with CIBR for superior risk separation,' Seth said. Business loans are a part of CRIF's commercial repository. CRIF uses this information to compute CIBR, which reflects the credit risk associated with the entity/business, while loans taken by individuals in their personal capacity are a part of its consumer repository and are used to compute CRIF credit score, which reflects the credit risk associated with the is reckoned to be the only credit bureau to offer this integrated information to the lender.'While all credit bureaus have both consumer and commercial repositories, CRIF is the only credit bureau which provides integrated information along with a credit score and CIBR,' a CRIF executive said, adding that over 100 lenders have used this facility. The government is also doing its bit to help improve credit access for MSMEs. It has launched a new Credit Assessment Model for micro and small enterprises based on scoring their digital footprints, which was announced in the July 2024 budget. This credit assessment model leverages the digitally fetched and verifiable data available in the ecosystem and devise automated journeys for MSME loan appraisal using objective decisioning for all loan applications and model-based limit assessment for both existing-to-bank (ETB) and new-to-bank (NTB) MSME borrowers.
Time of India
18-05-2025
- Business
- Time of India
An integrated view on promoter as well as business to help in assessing lending risk to MSMEs
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Credit bureaus could make lending decisions to micro, small and medium enterprises (MSMEs) easier by offering an integrated view on borrower's history as well as the worth of the business that the lender is giving money to,Credit bureau CRIF has started offering such services.'Many MSMEs find it challenging to access formal credit due to factors such as informal nature of business and lack of collateral,' said Sachin Seth, regional MD-India and South Asia at CRIF, a global fintech company that specialises in credit bureau and business information. said. 'On the other hand, lenders find it difficult to assess credit risk of these enterprises as this demands a comprehensive assessment of the financial health of the business and the credit risk profile of the business owners.'Credit gap—the difference between the demand for debt and supply of debt—for MSMEs is estimated at Rs 30 lakh crore, according to a report released by Sidbi last week.'To bridge this gap, CRIF offers a unique solution by integrating the consumer and commercial credit information coupled with CRIF's credit score and CIBR (CRIF India Business Rank). When risk assessment of self-employed or business is involved, lenders can leverage CRIF's credit score combined with CIBR for superior risk separation,' Seth loans are a part of CRIF's commercial repository. CRIF uses this information to compute CIBR, which reflects the credit risk associated with the entity/business, while loans taken by individuals in their personal capacity are a part of its consumer repository and are used to compute CRIF credit score, which reflects the credit risk associated with the is reckoned to be the only credit bureau to offer this integrated information to the lender.'While all credit bureaus have both consumer and commercial repositories, CRIF is the only credit bureau which provides integrated information along with a credit score and CIBR,' a CRIF executive said, adding that over 100 lenders have used this government is also doing its bit to help improve credit access for MSMEs. It has launched a new Credit Assessment Model for micro and small enterprises based on scoring their digital footprints, which was announced in the July 2024 credit assessment model leverages the digitally fetched and verifiable data available in the ecosystem and devise automated journeys for MSME loan appraisal using objective decisioning for all loan applications and model-based limit assessment for both existing-to-bank (ETB) and new-to-bank (NTB) MSME borrowers.
