Chapter 3 - Section 3.2MLIs Branch Network

Branches remain an important component of the MLI operating model. They support customer acquisition, sourcing of loan applications, credit appraisal, disbursement processes, portfolio monitoring, grievance management, and collections. Consequently, branch productivity, governance and service quality have a direct bearing on the operational effectiveness and portfolio outcomes.

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MLI Branch Network – Yearly Trend and Category-wise Breakup

MLI Branch Network – Yearly Trend and Category-wise Breakup - Category Wise

MLI Branch Network – Yearly Trend and Category-wise Breakup - Size Wise

3.2 MLIs Branch Network

Branches remain an important component of the MLI operating model. They support customer acquisition, sourcing of loan applications, credit appraisal, disbursement processes, portfolio monitoring, grievance management, and collections. Consequently, branch productivity, governance and service quality have a direct bearing on the operational effectiveness and portfolio outcomes.

As of March 31, 2026, MLIs operated 36,716 branches across the country, compared with 37,380 branches in the previous year, representing a year-on-year decline of 2%. Considering only the Microfinance Institutions (MFI) category—comprising NBFC-MFIs, Societies, Sec. 8 Coms, Trusts, MACS or Cooperatives—and excluding NBFCs and Pvt. Ltd. Coms, the year-on-year decline in the branch network is also 2%. The decline in branches in the microfinance sector is driven by factors such as overall contraction in portfolio and borrower outreach, cost optimisation, adoption of technology-enabled processes, cautious credit expansion, and institutional exits or consolidation.

As of March 31, 2026, the MFIs operated 28,019 branches, NBFCs engaged in microfinance operated 4,935 branches, and Pvt. Ltd. Coms functioning as BC agents operated 3,762 branches. By legal form, NBFC-MFIs accounted for the largest share, with 27,167 branches (74%). By institutional size, Very Large MLIs (GLP > ₹5,000 Cr.) accounted for 18,998 branches (52%) of the total branch network.

Figure 3.1: MLI Branch Network – Yearly Trend and Category-wise Breakup

A further segregation of the total branch network based on the legal forms of MLIs and the size of MLIs is given below:

Note: In the decadal trend graph of the branch network (2016–2026) shown above, the number of branches for each year is represented by blue bars, capturing all Micro Lending Institutions (MLIs). For FY 2025-26, however, the total branch network of 36,716 has been further segmented to provide deeper insights. Specifically, the distribution highlights MFIs (NBFC-MFIs, Societies, Sec. 8 Coms, Trusts, MACS, or Cooperatives) shown by red bars, NBFCs shown by green bars, and Pvt. Ltd. Coms working as BC agents shown by orange bars. This disaggregation enables a clearer understanding of the growth trajectory of MFIs within the overall branch network.