Chapter 2 Section 2.2.1Number of Loan Accounts (in lakhs)

NBFC-MFIs maintained the largest market share with 435 lakh loan accounts (42%), followed by Banks with 311 lakh loan accounts (30%).

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Market Share of Micro-Lenders in terms of Loans Accounts (in %)

Growth (in %) in Number of Loan Accounts across micro-lenders (in lakhs)

2.2.1 Number of Loan Accounts (in lakhs)

Figure 2.1: Market Share of Micro-Lenders in terms of Loan Accounts (in %)
Figure 2.1

As of March 31, 2026, the total number of loan accounts serviced by all micro-lenders stood at 1,040 lakh loan accounts. The NBFC-MFIs maintained the largest market share with 435 lakh loan accounts, representing 42%, followed by Banks with 311 lakh loan accounts (30%). Small Finance Banks (SFBs) serviced 160 lakh loan accounts (16%), NBFCs accounted for 98 lakh loan accounts (9%), and Other lenders comprised 36 lakh loan accounts (3%). On a year-on-year basis, only the ‘Others’ category registered positive growth in loan accounts at 50%, whereas all other micro-lender categories experienced declines: Banks (-30%), SFBs (-24%), NBFCs (-20%), and NBFC-MFIs (-16%).

Figure 2.2: Y-o-Y Growth (in %) in Number of Loan Accounts (in lakhs) across micro-lenders
Figure 2.2

As of 31st March 2026, the total loan account base for the microfinance sector is 1,040 lakhs, posting a Y-o-Y decline of 21%. All the micro-lenders except for Other Lenders have posted negative growth, including Banks (-30%), SFBs (-24%), NBFCs (-20%), and NBFC-MFIs (-16%), respectively.

Following years of rapid expansion, an uptick in delinquencies has led the micro-lenders to adopt a more cautious, quality-first approach to credit. As a result, both the volume of loans disbursed and total outstanding balances declined, reflecting a broader sectoral shift toward stronger risk controls and sustainable portfolio growth over short-term expansion.

This change was also prompted by the RBI regulations for responsible lending and the guardrails issued by the SROs for reducing overleverage and bringing the sector back to a better shape. As a result of this, there has been an improvement in terms of the number of micro-lenders per borrower, which can be observed from the following table:

Table 2.2 Distribution of Unique Active Borrowers across the number of micro-lenders as of March 2026 and March 2025
Active Lender Associations Unique Active Borrowers (in %) as of March 2026 Unique Active Borrowers (in %) as of March 2025
<=2 92.6% 90.5%
3 6.6% 5.6%
4 0.7% 2.3%
>=5 0.1% 1.6%

The improvement in borrower-level risk profile is evidenced by Table 2.2. Adherence to SRO-mandated guardrails restricting borrower association to no more than 3 micro-lenders (and capping total household indebtedness at ₹2,00,000) resulted in 92.6% of unique active borrowers being associated with 2 or fewer lenders as of March 2026 (up from 90.5% in March 2025). High-risk multi-lending (5 lenders or more) reduced significantly from 1.6% to a negligible 0.1%.