Chapter 3 - Section 3.3.2Rural–Urban Share of MLI Active Borrowers

MLIs serve low-income borrowers in both rural and urban markets. The rural–urban composition has changed over time. Urban borrowers represented a larger share in FY 2016, as reflected in Figure 3.4. The subsequent transition of several large, predominantly urban NBFC-MFIs into SFBs altered the composition of the remaining MLI portfolio. The current client base is predominantly rural, consistent with the continuing importance of rural markets in India. The data also shows an increasing share of rural clients from 2023 onwards. Smaller MLIs have generally retained a rural focus, although some institutions operate exclusively in urban markets.

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Trends in Rural-Urban Share of MLI Active Borrowers

3.3.2 Rural–Urban Share of MLI Active Borrowers

MLIs serve low-income borrowers in both rural and urban markets. The rural–urban composition has changed over time. Urban borrowers represented a larger share in FY 2016, as reflected in Figure 3.4. The subsequent transition of several large, predominantly urban NBFC-MFIs into SFBs altered the composition of the remaining MLI portfolio. The current client base is predominantly rural, consistent with the continuing importance of rural markets in India. The data also shows an increasing share of rural clients from 2023 onwards. Smaller MLIs have generally retained a rural focus, although some institutions operate exclusively in urban markets.

Figure 3.4: Trends in Rural-Urban Share of MLI Active Borrowers