Year: 2026
Type: article
Abstract: Microfinance has emerged as a major tool for enhancing financial inclusion by offeringfinancial services to under-served and low-income groups. In India, the microfinance industryhas witnessed immense growth in the recent past, with an increase in the number ofMicrofinance Institutions, Self-Help-Groups, NBFC-MFIs, and Small Finance Banks.However, microfinance outreach in various regions and population groups is at differentlevels, hence there is a need to improve it. This research aims to explore the microfinanceoutreach trends in India for years 2016-25, based on secondary data obtained from variousBharat Microfinance Reports. A descriptive and analytical approach has been followed toexplore various microfinance outreach indicators, such as the number of borrowers, numberof loan disbursements, rural-urban distribution, outstanding portfolios and quality ofportfolios. Furthermore, a Microfinance Penetration Index (MPI) was calculated and directlycompared against state-level Poverty Indices. The results suggest that microfinance outreachhas expanded over time, with a marginal deceleration in 2025. The results also highlight thesignificance of NBFC-MFIs in microfinance outreach and regional disparities wherein thesouthern and eastern regions have outperformed the northern and northeastern regions. Thestudy also indicates that regional microfinance outreach has greater loan exposure and a highlevel of delinquencies, which may pose a potential threat to credit risk in future. The studysuggests that although the microfinance sector in India has made significant progress in recentyears, some challenges are yet to be addressed, such as regional disparities and credit andportfolio risk.
Source: THE SCIENTIFIC TEMPER
Authors: SAYALI NENE, SACHIN ACHAREKAR
Institution: Somaiya Vidyavihar University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7204835649