The global rating agency S&P said on Wednesday that strict loan criteria, which has been implemented from April 2025 for India’s microfinance institutions, would curb asset quality pressure. The non -performing loan (NPL) ratio in the micro loan sector is expected to reach a higher level by the end of the financial year ending 31 March, 2026.
Due to the easy microfinance regulation, people involved in the poorest sections of India had increased debt in recent years. Now this sector has been strict again. S&P Global Ratings said in a statement that such regulatory fluctuations will remain the main feature of high risk and high-profit debt sector. In 2022, the loan rates in microfinance loan rates suddenly accelerated the loan as it became highly attractive to lenders.
In view of this boom, the self-control organization (SRO) Microfinance Institutes Network (MFIN) began to implement the stringent borrowing rules in August 2024. Since then, there has been a decrease in lending in this area.
First Published – March 26, 2025 | 10:04 pm IST
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(Tagstotranslate) microfinance lending norms