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The Economic Times

Economy / The Economic Times

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Indias microfinance overhang is finally easing as debt-stressed borrowers fall

The number of microfinance borrowers with multiple loans has significantly decreased. These borrowers still hold substantial outstanding loans, posing a higher credit risk. Portfolio at risk for these stretched borrowers is higher than others. The microfinance market saw a record peak in loans outstanding recently. Stricter underwriting practices are helping the sector recover from past challenges.

18 Aug 2026 12:41 am