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Borrower indebtedness in microfinance declines to 11.7%: RBI report
Despite rising stress in microfinance portfolios, RBI notes decline in borrower indebtedness as tighter underwriting and regulatory caps limit over-lending
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Even as the ratio of stressed assets in the microfinance sector increased in the second half of FY25 (H2 FY25), borrower indebtedness is showing a declining trend at 11.7 per cent, according to the Reserve Bank of India's (RBI's) Financial Stability Report.
Stressed assets in the segment rose, with 31–180 days past due (dpd) increasing to 6.2 per cent in March 2025 from 4.3 per cent in September 2024. The banking sector also saw an increase in stress in its microfinance portfolio, with 31–180 dpd rising to 6.5 per cent from 4.7 per cent. 'However, borrower indebtedness, measured by the
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