India’s Microfinance sector sees continued stabilisation, delinquencies decline to 2.8%: Equifax Insights report

• Industry 30+ delinquency declines further to 2.8% as of February 2026 
• Portfolio stands at Rs. 3.29 lakh crore, showing gradual stabilisation  
• Disbursements contract 14% YoY, signalling calibrated lending 
• NBFCs and NBFC-MFIs continue to outperform on credit quality

Mumbai, March 29, 2026: India’s microfinance sector is demonstrating signs of sustained stabilisation, with the industry’s 30+ days past due (DPD) delinquency rate declining to 2.8%, improving credit quality and a more disciplined lending environment, according to the latest Microfinance Insights Report released by Equifax.  

The total industry portfolio outstanding stood at Rs. 3,28,756 crore, registering a modest 2.48% month-on-month growth, even as the sector continues to consolidate following a period of elevated stress. On a year-on-year basis, however, the portfolio has contracted, indicating a shift toward more cautious and risk-aware lending practices.  

Disbursement trends point to a deliberate slowdown. The industry recorded a 14% decline in disbursement value and a 26% drop in volume for the period February 2025 to January 2026 compared to the previous year. This suggests lenders are prioritising portfolio quality over aggressive growth.  

Speaking on the findings, Aditya B. Chatterjee, Managing Director, Equifax, said: “The microfinance sector’s continued improvement in delinquency levels to 2.8% suggests a structural strengthening of credit discipline across the ecosystem. What we are witnessing seems to be a more measured and data-driven approach to lending, where growth is being balanced with risk. The moderation in disbursements, alongside improving repayment behaviour, indicates that lenders are focusing on building resilient portfolios. This phase of consolidation is critical for enabling sustainable, long-term expansion of the sector.” 

Across lender categories, NBFCs and NBFC-MFIs have emerged as the strongest performers on credit metrics, consistently reporting lower delinquency rates than the industry average. NBFCs, in particular, maintained the lowest delinquency levels across early, mid, and late-stage buckets.  

The report also notes a steady decline in early-stage stress, with 30+ delinquencies dropping consistently across all lender segments, reinforcing the trend of systemic improvement. Meanwhile, the top five states account for 57% of the total portfolio, with states such as Uttar Pradesh showing relatively lower contraction in both portfolio size and disbursements. 

State-level data indicates that while portfolio sizes have moderated across most regions, credit performance has improved consistently, with delinquency levels declining across the top 10 states. This points to a broad-based recovery rather than isolated improvements. 
The Microfinance Pulse Report is based on data submitted by member institutions of Equifax and provides aggregated insights into borrower behaviour, 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. 

For any further details, please contact:

Suhas Diwakar Zele (Head of Marketing & Communications, Equifax India)
suhasdiwakar.zele@equifax.com & marcom.india@equifax.com 

Kinjal Shah (The Media Manifest)
kinjal@themediamanifest.com 
 

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