MFIN: MFIs’ disbursements drop 24% y-o-y to ₹22,805 crore in Q1FY26

Current Context: On September 4, 2025, the Microfinance Institutions Network (MFIN) released its 54th Micrometer report for Q1FY26, showing a 24% year-on-year decline in microfinance disbursements to ₹22,805 crore.

• The client base dropped from 4.5 crore to 3.8 crore, while Assets Under Management (AUM) fell 16.4% to ₹1.34 lakh crore.
• The report covers data from 47 Non-Banking Financial Company–Microfinance Institutions (NBFC-MFIs) across India.
• Despite funding challenges, Portfolio at Risk (PAR) in the 31–60 day bucket showed improvement, indicating better credit quality.
• Bihar led in portfolio outstanding, while Tamil Nadu recorded the highest average loan per account at ₹31,363.
• The share of NBFC-MFIs in the overall microfinance industry stood at 35.6%, with a loan portfolio of ₹1.34 lakh crore.

Question:

Q.1 As per the 54th Micrometer report, what was the year-on-year decline in Assets Under Management (AUM) of NBFC-MFIs?
a) 10%
b) 12.5%
c) 16.4%
d) 18%

Answer: c) The client base dropped from 4.5 crore to 3.8 crore, while Assets Under Management (AUM) fell 16.4% to ₹1.34 lakh crore.