Credit flow to bottom tier slows as microfinance lenders turn to safer borrowers: SIDBI-Equifax

The SIDBI-Equifax report shows India's microfinance sector is in a correction phase, with the share of new-to-credit borrowers falling to 20% in March from 33% three years ago and 23 million small borrowers exiting the formal banking system. Unique microfinance borrowers dropped to 63 million from 87 million two years earlier as lenders tightened norms to curb over-indebtedness. However, structural improvements are visible—average ticket size rose to Rs 62,945, loans above Rs 75,000 grew to 41% from 26%, and multi-lender exposure declined, indicating better credit discipline.