4 months ago
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Microfinance lending successful Karnataka, which is present astir ₹58,000 crore with astir 1.07 crore progressive indebtedness accounts, is showing signs of recovery, manufacture sources say.
While the MFIs person been witnessing betterment since October, 2025, the manufacture sources said that lending has been strict aft the Reserve Bank of India (RBI) brought “guardrails”, tightening the lending process.
Top 5 districts
Currently, the apical 5 districts by fig of accounts are Belagavi, Mysuru, Bengaluru (Rural and Urban), Tumakuru, and Mandya, portion successful presumption of portfolio size Bengaluru (Rural and Urban), Belagavi, Mysuru, Tumakuru and Mandya pb successful the State, said a enactment from AKMI, which organised “The Microfinance Karnataka Summit 2026” successful Bengaluru connected Wednesday.
It said that indebtedness publication maturation successful the State’s microfinance assemblage is robust and growing. The pre-provision operating nett to assets nether management, which had weakened successful 2024-2026, is projected to amended successful the 2027 fiscal year.
“In the past 3 months, the betterment has been astir 98%-99%. The outgo of recognition to the companies is expected to diminution to astir 4% successful 2026-2027,” Association of Karnataka Microfinance Institutions (AKMI) sources said.
The portfolio delinquency complaint that had reached 8.59% by September 2025 has declined to 5.6% by November, the AKMI information showed.
Higher delinquency
However, owing to respective factors including floods/ rainfall and misinformation implicit recognition repayment, the MFIs had recovered betterment pugnacious and NPAs had increased. The indebtedness portfolio, which was astir ₹70,000 crore earlier the manufacture came nether accent owing to higher delinquency successful 2025, is present astir ₹58,000 crore.
However, the delinquency complaint successful Belagavi, Mandya, Davangere, and Chamarajanagar districts proceed to beryllium implicit 6%, portion successful Vijayanagara, Mysuru, and Tumakuru districts it is implicit 5%, according to information released by AKMI.
In 10 Karnataka districts, indebtedness outstanding remained astatine ₹12,128 crore by the extremity of November 2025. The information besides said that the Karnataka marketplace has witnessed plus prime decline.
‘Misinformation campaign’
Sources said that aft a “misinformation campaign” that the microfinance loans would beryllium waived by the authorities and successful anticipation of a authorities successful this regard, galore indebtedness accounts became delinquent, causing stress. AKMI sources said that disorder arose owing to cognition of unlicensed lenders, who connected galore occasions utilized unit to retrieve credit.
“The RBI-registered companies did not retrieve wealth done force,” the sources claimed.
Adding to disorder were a ample fig of reports of harassment successful indebtedness recovery, starring to adjacent to a twelve suicides. As galore arsenic 134 FIRs person been filed crossed the State.
