New Delhi [India], November 8 : Non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs) strengthened their hold as the primary lending segment in India’s microfinance space, expanding their market share to 44.7 per cent in September 2026. The overall gross loan portfolio of the microfinance sector moderated to Rs 328.4 thousand crore during this period, even as disbursement value recorded an annual expansion.
As per a report by CRIF Credit Information Services, the total industry portfolio declined 5.0 per cent year-on-year and 1.4 per cent quarter-on-quarter, comprising 9.6 crore active loans across a live borrower base of 6.4 crore individuals. At the same time, the average exposure per loan rose 22.7 per cent year-on-year to Rs 34.2 thousand.
“A continued shift towards larger-ticket loans, increased concentration among borrowers associated with fewer active lenders, and the growing prominence of NBFC-MFIs, accounted for 44.7% of the industry portfolio,” the report noted.
Despite the slight contraction in overall loan outstanding, fresh lending activity gathered momentum on an annual basis. Disbursements stood at Rs 56,956 crore in the second quarter of financial year 2027, declining 7.5 per cent sequentially but advancing 5.1 per cent over the corresponding quarter of the previous fiscal. Average ticket size climbed 17.5 per cent year-on-year to Rs 63.1 thousand, with first-time borrowers accounting for 19.7 per cent of sanctioned loans and 16.5 per cent of the total sanctioned sum.
"These trends collectively point towards an evolving microfinance landscape marked by borrower consolidation, changing lending patterns and continued focus on portfolio quality," the report added.
Within lender segments, NBFC-MFIs held an outstanding portfolio of Rs 146.7 thousand crore, marking an increase of 9.4 per cent year-on-year. NBFCs recorded growth as well, while banks witnessed a portfolio contraction that was attributed in part to the reclassification of microfinance exposures into retail loans. 
Meanwhile, loans in the Rs 50,000 to Rs 80,000 ticket bracket constituted 41.3 per cent of total origination value, and disbursements for loans above Rs 1 lakh grew by 41.3 per cent year-on-year.
Asset quality indicators remained contained across the industry. Portfolio at Risk between 31 and 180 days stood at 1.6 per cent in September 2026, improving from 4.6 per cent logged in September 2025. Delinquency remained lower among borrowers tied to fewer institutions, as clients linked to two or fewer active lenders made up 81.2 per cent of the aggregate portfolio and maintained a PAR 31-180 of 1.9 per cent.
The report stated that "the September 2026 edition of MicroLend indicates that India's microfinance sector continues to consolidate around stronger borrower profiles and larger loan sizes. While portfolio outstanding moderated, year-on-year disbursement value improved and delinquency remained contained."
"Regulatory guardrails and greater borrower concentration among a smaller number of lenders continue to support stable portfolio performance," the report noted.
On the geographic front, the top ten states represented 82.3 per cent of the total gross loan portfolio. Bihar held the largest portfolio at Rs 51.1 thousand crore with a PAR 31-180 of 1.2 per cent, while Tamil Nadu reached Rs 40.3 thousand crore following a 3.7 per cent sequential expansion.