Chapter 2 Section 2.2Loan Accounts

The total number of loan accounts serviced by all micro-lenders stood at 1,040 lakhs as of 31st March 2026, a Y-o-Y decline of 21%.

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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 Loan Accounts

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%.

2.2.2 State/UT-wise No. of Loan Accounts (in lakhs)

Table 2.3 depicts the loan accounts serviced across various States and Union Territories. A year-on-year analysis indicates that 33 States and UTs experienced a decline in the number of loan accounts. In contrast, three North Eastern states—Nagaland (18%), Arunachal Pradesh (7%), and Meghalaya (1%), registered an increase, although their overall share in the microfinance sector remains minimal. Notably, the principal states with the highest loan outstanding, including Karnataka (-28%), West Bengal (-24%), Tamil Nadu (-23%), Bihar (-22%), Uttar Pradesh (-17%), etc., saw a contraction in the number of loan accounts, reflecting broad-based caution across the board and in these states in particular.

Table 2.3 Loan Accounts (in lakhs) of all micro-lenders across States/UTs – March 2026 and March 2025 (in descending order of Loan Accounts)
Sl. No. State/UT March 2026
(in lakhs)
March 2025
(in lakhs)
Y-o-Y Growth
(in %)
1 Bihar 154.47 197.60 -22%
2 Uttar Pradesh 120.66 145.25 -17%
3 Tamil Nadu 113.14 146.02 -23%
4 West Bengal 89.65 118.22 -24%
5 Karnataka 88.45 123.00 -28%
6 Maharashtra 82.48 105.11 -22%
7 Madhya Pradesh 63.60 77.55 -18%
8 Odisha 61.65 80.69 -24%
9 Rajasthan 42.86 54.87 -22%
10 Jharkhand 35.19 41.61 -15%
11 Keralam 29.44 40.29 -27%
12 Gujarat 28.75 38.41 -25%
13 Andhra Pradesh 22.31 24.71 -10%
14 Assam 22.11 24.20 -9%
15 Chhattisgarh 18.75 23.64 -21%
16 Punjab 16.95 18.82 -10%
17 Telangana 16.80 17.46 -4%
18 Haryana 14.72 18.18 -19%
19 Tripura 4.67 6.53 -29%
20 Uttarakhand 4.43 6.05 -27%
21 Puducherry 2.48 3.12 -20%
22 Delhi 1.47 1.90 -23%
23 Others3 1.46 0.63 132%
24 Meghalaya 0.52 0.52 1%
25 Himachal Pradesh 0.50 0.58 -12%
26 Mizoram 0.37 0.41 -10%
27 Arunachal Pradesh 0.35 0.33 7%
28 Goa 0.35 0.57 -40%
29 Jammu & Kashmir 0.27 0.31 -13%
30 Sikkim 0.24 0.36 -34%
31 Manipur 0.22 0.33 -32%
32 Nagaland 0.21 0.18 18%
33 Chandigarh 0.12 0.13 -10%
34 Andaman & Nicobar Islands 0.04 0.05 -16%
35 Dadra and Nagar Haveli and Daman and Diu 0.02 0.02 -28%
36 Lakshadweep 0.0000 0.0001 -33%
37 Ladakh 0.00 0.00 -100%
Sector 1,040 1,318 -21%

3 The unmapped states and districts within the geo master have been assigned to the ‘Others’ category.