{
  "id": 1545065,
  "title": "Microfinance finds its way out of the debt trap",
  "url": "https://urgent.news/2026/08/17/microfinance-finds-its-way-out-of-the-debt-trap",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-17T19:11:12.000Z",
  "source": {
    "name": "The Economic Times",
    "slug": "the-economic-times",
    "url": "https://economictimes.indiatimes.com/industry/banking/finance/indias-microfinance-overhang-is-finally-easing-as-debt-stressed-borrowers-fall/articleshow/133305695.cms"
  },
  "original_language": "en",
  "account": "Kolkata has seen a reduction in the number of microfinance borrowers with loans from multiple lenders, according to data from Crif High Mark. As of June, 1.35 million borrowers, or 2% of the total borrower base of 66 million, have loans from four or more lenders. This is a decrease from the peak of nearly 5.6 million borrowers, or 6.4%, in March 2024. Despite the reduction, these borrowers still owe ₹14,711 crore in outstanding loans, which are of higher credit risk. The share of loans not serviced for over 30 days and up to 180 days for these stretched borrowers is 7.4-7.9%, compared to 1.9% and 4.1% for borrowers associated with one or two lenders, respectively. Sector leaders anticipate that these borrowers will either repay fully or settle their accounts to re-enter the institutional credit system. Nearly 21 million borrowers in the bottom of the pyramid segment have exited the formal credit system due to default or normal course as lenders have tightened underwriting standards. The ₹14,711 crore pool of overleveraged borrowers represents 4.4% of the sector's total loan outstanding of ₹3.33 lakh crore, down from ₹35,712 crore a year prior. The microfinance sector is recovering with stronger underwriting practices and stricter lending discipline, according to CareEdge Ratings. However, smaller micro lenders continue to face liquidity issues, higher borrowing costs, and cautious lender appetite, while well-capitalized and bigger NBFC-MFIs have better access to funding.",
  "summary": null,
  "key_points": [
    "Microfinance borrowers with loans from multiple lenders reduced from 6.4% to 2% in June 2024.",
    "Sector recovery attributed to stronger underwriting practices and stricter lending discipline."
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}