Inflationary pressures, reduction in discretionary cash flows may impact collection of MFIs: Report

Microfinance borrowers' repayment behavior may face challenges from inflation and reduced household cash, though the West Asia conflict hasn't directly impacted the sector. El Nino's effect on rural incomes also warrants attention. While Karnataka saw collection dips after new regulations, Tamil Nadu and Bihar adapted effectively. Stricter lending guardrails have significantly improved securitised loan pool performance, reducing overdue build-up by limiting exposure to over-leveraged borrowers.

Raccontata daeconomictimes.indiatimes.com