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MFI constitute the largest share of lending portfolio in June 2026
BusinessLine 1 hr ago·14 Oct 2026, 4:20 pm
Microfinance institutions (MFIs) now make up the biggest slice of the overall lending portfolio as of June 2026, overtaking traditional banks and NBFCs. The share has risen sharply, moving from a relatively stable 36‑38% range over the previous three years to become the dominant component of credit exposure.
For investors, this shift signals a growing reliance on the micro‑finance sector for loan growth, which could alter the risk profile of the broader financial system. MFIs typically serve lower‑income borrowers, so higher exposure may increase sensitivity to economic slowdowns, repayment stress, and policy changes affecting credit costs.
Going forward, watch for any regulatory updates targeting MFIs, trends in borrower delinquency, and how major lenders adjust their asset allocations in response to the evolving credit mix.
Excerpt from BusinessLine
Lending from microfinance institutions constituted 43 per cent of the ₹3.3 lakh crore of the loan portfolio balance in June 2026, according to data from Transunion CIBIL. This share stayed at around 36 per cent to 38 per cent between June 2022 to June 2025, making this the most significant increase in five years. The…Read the original at BusinessLine
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