The Gross Loan Portfolio (GLP) of the microfinance industry in Tamil Nadu declined 23.5% to ₹43,700 crore at the end of the first quarter of 2025-2026, from ₹57,100 crore in the comparable period last year.
Meanwhile, microfinance industry players said there has been no major impact from the State government’s law enacted to prevent coercive recovery of micro-loans by money-lending entities.
According to CRIF High Mark, a credit bureau, Tamil Nadu’s gross loan portfolio declined 6.7% on a quarter-on-quarter basis from ₹46,800 crore as of March 30, 2025.
The Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) Act, 2025, was notified in June 2025. The provisions of the Act relating to coercive action against borrowers also apply to non-banking financial companies registered with the Reserve Bank of India and co-operative banks and societies.
“After minor initial hiccups due to the ordinance passed by Tamil Nadu, the situation is back to normal in Tamil Nadu. There was no impact on collections due to the ordinance, and Tamil Nadu continued to perform well. The implementation of stricter guardrails by self-regulatory organisations has impacted disbursements; at the same time, portfolio quality has improved. Things are looking better for the industry,” Sadaf Sayeed, CEO, Muthoot Microfin, said. His company has a ₹3,200 crore microloan portfolio in Tamil Nadu.
