Finmin to hold meeting with MFI players tomorrow
Finance Ministry will hold a meeting with microfinance institutions (MFIs) on Wednesday amid rising bad loans and delinquencies across all types of lenders in the sector. According to sources, the Department of Financial Services Secretary is likely to chair the meeting with senior officials of MFIs here.
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The meeting assumes significance as it comes with the sector showing signs of stress and rising delinquencies.
Credit to the microfinance sector by banks (including SFBs), NBFC-MFIs and other NBFCs has decelerated during the current financial year so far after witnessing rapid growth during the last three years, according to a latest report of the Reserve Bank.
«The microfinance sector is showing signs of stress, with rising delinquencies across all types of lenders and ticket sizes. During H1:2024-25, share of stressed assets increased, with 31-180 days past due (dpd) rising from 2.15 per cent in March 2024 to 4.30 per cent in September 2024,» said the RBI's Financial Stability Report, December 2024.
Importantly, among borrowers who had availed loans from multiple lenders and those with higher credit exposure, impairment remained high.
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