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Microfinance lending dips as uneven monsoon alters the landscape

Economic Times 7 hrs ago·4 Aug 2026, 7:31 pm

India's microfinance sector contracted in the first quarter after a previous rebound. Uneven monsoon progress weighed on rural demand and lender caution grew. The sector's portfolio shrank four percent to ₹3.26 lakh crore by June end. Business usually slows during this period, but rainfall added concerns. Lenders remain cautious about growing loans due to uncertain patterns.

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