Microfinance lenders sharply increased disbursements of loans above ₹1 lakh in the June quarter, while smaller-ticket loans declined, reflecting a shift towards larger exposures amid improving asset quality.
Microfinance loans of over Rs 1 lakh witnessed an 89.8 per cent jump in disbursements during the June quarter, indicating a strong preference among lenders towards bigger value loans -- considered safer from an asset quality maintenance perspective, a report said on Tuesday.According to a report by Crif High Mark, there was a 79 per cent jump in the disbursement of loans between Rs 80,000 to Rs 1 lakh during the June quarter, while those under Rs 30,000 declined by 35 per cent and ones between Rs 30-50,000 declined by a fifth.As per the regulatory definition, a collateral free loan of up to Rs 3 lakh qualifies as a microfinance lending.Traditionally, lenders had been extending smaller ticket size loans but there has been a marked shift in preference to write bigger quantum loans since the microfinance institution (MFI) industry faced a challenging patch around two years ago due to excessive lending to the same borrower.Over 77 per cent of the loans above Rs 1 lakh went to existing borrower with the same lender, making clear the prioritisation of asset quality.In the report, Crif said the Rs 40,000-Rs 80,000 segment remains the "anchor" across India, commanding over 40 per cent of origination in states such as Bihar, Uttar Pradesh, Madhya Pradesh, Odisha and Rajasthan.The average exposure per loan increased by nearly 20 per cent to Rs 32,400 per borrower reflecting disbursement of higher ticket-size loans supported by stronger borrower profiles, the credit information company said.The overall disbursements were up 18.6 per cent when compared to the year-ago period at Rs 61,100 crore but down by nearly 20 per cent on-quarter on seasonal impact, the report said.The overall portfolio outstanding de-grew 7 per cent on-year to Rs 3.33 lakh crore, but was stable on-quarter, the report said.From an asset quality perspective, loans unpaid for between 1 and 180 days improved to 2.3 per cent as of June from 2.6 per cent in March this year and 7.1 per cent in June last year, the report said.Published on August 12, 2026
