Microfinance Sector Returns to Loan Portfolio Growth After Quarters of Decline

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India's microfinance sector has recorded a return to growth in its Gross Loan Portfolio (GLP) in the quarter ending March 31, 2026, after several consecutive quarters of decline. Lenders had introduced key regulatory measures, including a three-lender cap per borrower and a Rs 2 lakh borrowing limit, to address rising bad loans. These steps were aimed at curbing over-indebtedness among borrowers and improving credit discipline across the sector. The combination of tighter lending norms appears to have stabilized asset quality and restored portfolio momentum.

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