The microfinance sector is undergoing a structural transformation in ticket size composition, pushing the industry’s average ticket size to its highest recorded level, according to the Equifax-SIDBI Microfinance Pulse Report. Loans above ₹75,000 now contribute 38 per cent of the total disbursement value, up from 25 per cent the previous year.
This comes amidst the microfinance industry’s total portfolio outstanding declining 22 per cent year-on-year (y-o-y) to stand at ₹2,69,897 crore as at December-end 2025.
The share of loans below ₹50,000 has declined to 17 per cent from 33 per cent in October-December 2025.
The report noted that this migration toward higher ticket lending has pushed the industry’s average ticket size to its highest recorded level, indicating rising credit confidence and lenders’ preference for providing higher exposure to existing, proven customers.
The average ticket size in October-December 2025 has climbed to a historic high of ₹61,253, up 16 per cent y-o-y over the year ago period’s ₹52,748, reflecting a cumulative shift toward higher-value lending.
The contraction in the outstanding loan portfolio reflects tighter underwriting, moderated expansion strategies, and the introduction of stricter guardrails to restrict the number of loans and leverage at a borrower level, the report said.
“While the overall outstanding portfolio has contracted, new lending activity has registered steady growth. Industry disbursements for the October–December 2025 quarter saw a 6 per cent year-on-year growth, reaching ₹63,348 crore, alongside a clear redistribution of market share,” per the report.
Aditya B Chatterjee, Managing Director, Equifax said, “What we are witnessing is a necessary and healthy correction in the microfinance cycle. Periods of accelerated growth are often followed by consolidation, and this phase appears to be restoring balance in the system.”
The report noted that the industry’s 30+ days past due (DPD) delinquency has nearly halved y-o-y, signalling a broad-based normalization in borrower repayment behaviour.
Risk metrics have improved across earlier buckets. Early-stage stress indicators (1–29 DPD) and mid-stage delinquencies have steadily declined over the past four quarters. Borrower leverage also remains stable, with the share of single-lender borrowers rising to 73 per cent in December 2025, suggesting improved credit concentration discipline.
Chatterjee said the meaningful decline in delinquencies (30-179 dpd) to 3.9 per cent reflects improved credit discipline, more calibrated underwriting and stronger risk monitoring across lenders.
However, stakehoders must remain cognizant that while fresh slippages are under better control, legacy stress is still working its way through ageing buckets, as evidenced by the 180+ dpd bucket rising by 81 bps from September to December 2025.
Importantly, the rise in average ticket sizes indicates that lenders are more comfortable with higher exposure to existing borrowers with a good track record, rather than a sign of stress-led borrowing.
Chatterjee emphasised that a sector that grows with prudence, data-led decision making and responsible credit expansion will be far more resilient over the long term.
NBFC-MFIs now account for 44 per cent of new sourcing, strengthening their dominance in the segment. Conversely, private sector banks continued to curtail their exposure, registering a significant 26 per cent contraction in disbursals.
Published on March 16, 2026
