Microfinance business shrinks in Q2 as delinquency rates surge

The microfinance industry contracted in Q2 FY25 with delinquency rates on loans rising to 4.3 per cent in September 2024. Borrowers with multiple loans decreased. Lenders urged the government for a credit guarantee scheme and other supports. Delinquencies were high in Bihar, Tamil Nadu, Uttar Pradesh, and Odisha. Small finance banks were most affected.