The overall microfinance gross loan portfolio stood at ₹3.34 lakh crore at the end of April, down from ₹3.39 lakh crore a month ago, said the credit information company.
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Lenders attributed this to the typical slack first quarter pattern when credit demand remains muted.
Before this, the microfinance market showed a rebound after seven successive quarters of intense portfolio contraction following asset quality stress.
“April always shows a degrowth. In fact, the first quarter is moderate in terms of credit disbursement,” a senior bank executive said. “The credit picks up before the festive season in the second quarter and the trend goes on till the fourth quarter,” he added.
Also Read: LIC launches revamped Jeevan Sathi policyPrivate banks’ microfinance loan outstanding stood at ₹85,165 crore as of April 30 as compared with ₹89,548 crore a month prior, reflecting a 4.9% month-on-month drop. The outstanding microfinance portfolio of small finance banks also contracted further to ₹49,712 crore from ₹50,725 crore for the same period, Equifax data showed.
“Microfinance loan disbursement in April was around 20% lower than in March,” a managing director with a microfinance firm said.
The non-banking financial companies-microfinance institutions (NBFC-MFIs) however continued to grow their cumulative gross portfolio to ₹1.43 lakh crore at the end of April. Their cumulative portfolio stood at ₹1.42 lakh crore as on March 31. Other NBFCs saw their cumulative portfolio grow to ₹46,652 crore from ₹46,158 crore over the same period.
The microfinance market in April marked 9% year-on-year contraction. The loans disbursed between May 2025 and April 2026 was 4% lower than what was in the year-ago period. Bihar, Uttar Pradesh, Rajasthan and Jharkhand witnessed a positive year-on-year growth in disbursements.
The Equifax report showed that the industry recorded a steady decline in 30+ day delinquency rates across all lender categories. NBFCs and SFBs reported lower 30+ day delinquency rates compared to the overall industry average as of April 2026.