From ₹25K to ₹75K+: India’s credit market sees steady transition toward higher ticket loans, Reveals Equifax-SIDBI Microfinance Pulse Report

• Loans above ₹75,000 now drive 38% of the disbursement value.
• Bihar retains leadership in industry exposure with a 16% market share, while all top 10 states report improved delinquency trends.
• Disbursements grew by 6% year-on-year in Q3FY26 to reach ₹63,348 crore with NBFC-MFIs capturing a 44% share.

Mumbai, 16th March 2026: India’s microfinance sector is entering a phase of disciplined recalibration, marked by a sustained improvement in credit quality and a structural transition in lending dynamics, according to the latest Microfinance Pulse Report released by Equifax India in collaboration with Small Industries Development Bank of India (SIDBI).

The report highlights a structural transformation in ticket size composition. Loans above ₹75,000 now contribute 38% of the total disbursement value, up from 25% the previous year, while the share of loans below ₹50,000 has declined to 17% from 33% in Oct-Dec’2025. This migration toward higher ticket lending has pushed the industry’s average ticket size to its highest recorded level, indicating rising credit confidence and lenders' preference for providing higher exposure to existing, proven customers.

As of December 31, 2025, the microfinance industry’s total portfolio outstanding stood at ₹2,69,897 crore, down 22% compared to the previous year. The contraction reflects tighter underwriting, moderated expansion strategies, and the introduction of stricter guardrails to restrict the number of loans and leverage at a borrower level.

While the overall outstanding portfolio has contracted, new lending activity has registered steady growth. Industry disbursements for the October–December 2025 quarter saw a 6% year-on-year growth, reaching ₹63,348 crore, alongside a clear redistribution of market share. NBFC-MFIs now account for 44% of new sourcing, strengthening their dominance in the segment. Conversely, Private sector banks continued to curtail their exposure, registering a significant 26% contraction in disbursals.

The report reveals that the industry’s 30+ days past due (DPD) delinquency has nearly halved year-on-year, signaling a broad-based normalization in borrower repayment behavior. At the same time, the average ticket size has climbed to a historic high of ₹61,253, up 16% year-on-year, reflecting a cumulative shift toward higher-value lending.

Risk metrics have improved across earlier buckets. Early-stage stress indicators (1–29 DPD) and mid-stage delinquencies have steadily declined over the past four quarters. Borrower leverage also remains stable, with the share of single-lender borrowers rising to 73% in December 2025, suggesting improved credit concentration discipline.

State-level trends show resilience in key markets. Bihar continues to remain the largest microfinance state by portfolio size, accounting for 16% of the industry’s exposure. Uttar Pradesh recorded the lowest portfolio contraction among the top 10 states at 16% year-on-year, while Tamil Nadu reported the lowest 30+ delinquency ratio among major states at 3.09%. Meanwhile, Karnataka saw the highest shrinkage in portfolio over the last year at 34%. Notwithstanding the portfolio contraction, all top 10 states recorded meaningful improvements in delinquency compared to December 2024.

The report also underlines improving credit health in Aspirational Districts identified by NITI Aayog. Portfolio outstanding in these districts stood at ₹40,351 crore, contributing 15% to the overall industry portfolio. Here too, stress indicators improved significantly, with 30+ delinquency declining from 8.77% to 4.00% year-on-year, and 90+ delinquency reducing from 4.98% to 2.55%.

Speaking on the Report, Aditya B. Chatterjee, Managing Director, Equifax said, “What we are witnessing is a necessary and healthy correction in the microfinance cycle. Periods of accelerated growth are often followed by consolidation, and this phase appears to be restoring balance in the system. The meaningful decline in delinquencies (30-179 dpd) to 3.9% reflects improved credit discipline, more calibrated underwriting and stronger risk monitoring across lenders. However, we must remain cognizant that while fresh slippages are under better control, legacy stress is still working its way through ageing buckets, as evidenced by the 180+ dpd bucket rising by 81 bps from September to December 2025. Importantly, the rise in average ticket sizes indicates that lenders are more comfortable with higher exposure to existing borrowers with a good track record, rather than a sign of stress-led borrowing. A sector that grows with prudence, data-led decision making and responsible credit expansion will be far more resilient over the long term.”

The Microfinance Pulse Report is based on data submitted by member institutions of Equifax and provides aggregated insights into borrower behavior, portfolio trends and systemic risk across banks, small finance banks, NBFC-MFIs, NBFCs and not-for-profit MFIs.

About Equifax

Equifax Credit Information Services Pvt. Ltd. (Equifax India) is one of India’s leading credit information and analytics companies and part of global data, analytics and technology leader Equifax Inc. Since launching its Consumer Bureau in 2010, Equifax India has built one of the country’s most inclusive credit data ecosystems, with over 2.1 billion reported tradelines and insights across retail, microfinance, commercial and employment segments.

Serving 7,000+ banks and NBFCs, Equifax India leverages advanced analytics, AI-driven solutions and cloud-enabled infrastructure to deliver high standards of data freshness and accuracy. The company plays a critical role in enabling responsible lending, strengthening risk management and expanding access to formal credit across India’s growing credit economy.