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Banks' microfinance portfolio outstanding contracted by 40% year-on-year to ₹65,687 crore successful 3rd 4th of FY26, according to a study released connected Monday (March 16, 2026).
The autumn is the sharpest among each categories of lenders, which besides includes dedicated non-bank concern companies-MFIs (microfinance institutions) and tiny concern banks, according to the study by a recognition accusation company.
Persistent accent successful plus prime led to tightening of underwriting standards similar adoption of guardrails to restrict fig of loans and leverage astatine a borrower level, arsenic per the study by Equifax and SIDBI.
Liquidity constraints peculiarly successful smaller lenders besides led to little disbursements, the study said.
The wide manufacture portfolio outstanding was down 22% year-on-year and 7% sequentially successful December, 2025.
The largest contraction has been seen by banks, followed by 25% for tiny concern banks, 22% by not for nett MFIs and others, 14% and 4% by NBFC-MFIs and NBFCs, respectively.
The marketplace stock of banks has slipped to 25% successful Q3FY26 from 35% successful the year-ago period, portion the aforesaid for NBFC-MFIs has risen to 44% from 37%.
The study said that NBFC-MFIs present relationship for 44% of caller sourcing. However, backstage assemblage banks continued to curtail their exposure, registering a 26% contraction successful disbursals.
It tin beryllium noted that the MFI manufacture has been grappling with challenges for the past fewer quarters, but immoderate experts person been opining that the manufacture is cyclical and enactment volition travel back.
The CIC's study said adjacent arsenic the wide outstanding portfolio has contracted, caller disbursements successful the October-December 2025 4th grew 6% year-on-year to ₹63,348 crore.
The fig of loans disbursed by the NBFC-MFIs has accrued to 48 lakh successful Q3FY26, from 43 lakh successful a year-ago period.
However, the remainder of the players saw a diminution successful fig of loans disbursed, with banks disbursing 27 lakh loans successful Q3FY26, from 42 lakh successful a year-ago period, NBFCs disbursing 12 lakh loans successful Q3FY26, from 15 lakh successful Q3FY25, study added.
