Women attend a microfinance meeting in an Indian office.
Non-banking financial companies (NBFCs) are strengthening their position in the microfinance sector, evidenced by an increase in their share of the gross loan portfolio. This trend emerges even as the overall microfinance loan book experienced a slight contraction.
According to data from a credit information company, the total microfinance gross loan portfolio stood at ₹3.34 lakh crore at the close of April. This represents a marginal decrease from ₹3.39 lakh crore recorded a month prior, indicating a period of muted demand within the sector.
Despite this overall dip, the growing share held by non-banks suggests a strategic expansion or a shift in market dynamics where these entities are capturing a larger portion of the available lending opportunities. The reasons behind the muted demand remain under observation, but NBFCs appear to be capitalizing on the existing landscape.
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