Even amid a slowdown, India’s microfinance sector continues to focus on livelihood support, with 91% of loans directed towards income-generating activities, according to the latest Sa-Dhan Bharat Microfinance Report.
Released on Friday in Mumbai, the Sa-Dhan Bharat Microfinance Report 2025 highlighted that the sector remains committed to supporting livelihoods despite a temporary slowdown.
At the end of FY2024–25, the total active client base stood at 8.28 crore, with a total loan outstanding of ₹3,81,225 crore, based on data from credit information companies and industry sources. The report noted a 13% decline in clients and a 14% drop in loan portfolios.
Jiji Mammen, Executive Director and CEO of Sa-Dhan, said, “Industry guardrails and lending restrictions led to temporary de-growth, but with 91% of loans supporting income generation, we expect an improvement this year.”
The Self-Help Group Bank linkage programme continued to grow, with total outstanding loans reaching ₹3.04 lakh crore across 84.9 lakh SHGs, linking 17.1 crore households to formal credit.
Within the micro-lending ecosystem, NBFC-MFIs and NBFCs accounted for 86% of the total client base and 84% of the sector’s portfolio. Bihar, Tamil Nadu, Uttar Pradesh, West Bengal, and Karnataka emerged as the top five microfinance states.
Prepared in partnership with NABARD, the report covers data from over 200 micro-lending institutions, representing 98% of industry operations, offering a detailed view of client outreach, financial performance, and regional trends in India’s microfinance sector.
Commenting on the findings, Shaji K.V., Chairman of NABARD, said, “Microfinance has become a cornerstone of India’s socio-economic transformation, helping millions access timely and collateral-free credit to build sustainable livelihoods.”
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