CreditAcess Grameen’s (CA Grameen) top disbursements rose 33 percent year-on-year to ₹5,322 crore in Q2FY26. Disbursements rose by 22 percent in the first quarter, after the MFI recorded four consecutive quarters of decline in growth in its disbursements.
Satin Creditcare’s disbursements rose 6 percent year-on-year and 17 percent quarter-on-quarter (qoq) to ₹2,421 crore in the second quarter. Muthoot Microfin’s disbursements stood at ₹2,274 crore in the second quarter, over ₹1,775 crore-₹2,035 crore of disbursements made during Q3FY25 to Q1FY26. Spandana Sphoorty’s payouts improved to ₹427 crore in September 2025 from ₹33 crore in April 2025.
“The growth would vary from institution to institution. But I think we will not have the growth rate that we saw earlier, between 25 and 40 percent. It will be a cautious growth, in the region of around 10 percent, which is best for the sector as a whole. We are tackling ourselves by not growing sharply above 10 percent,” said SatinCredit Creditcare CMD HP Singh.
“Since we have seen positive trends in collections, processes and attrition factors, we have been paying out. Since the last three to four months, we have been paying out, but we have not gone over the top, taking into account various factors. Cautious growth is probably what will happen from here on out,” he said.
MFIs were forced to put a brake on fresh disbursements in FY25 after seeing a spike in non-performing assets (NPAs) due to borrower overleverage, political developments in some states and the MFIs themselves growing at a rapid pace. The industry’s self-regulatory organizations (SROs) had to introduce new guardrails, including not providing loans to customers with debt loads above ₹2 lakh, not providing loans to borrowers who have more than 3 outstanding loans, and not providing loans to delinquent customers.
Jiji Mammen, CEO of Sa-Dhan, a Reserve Bank of India (RBI) recognized SRO for the MFI sector, says Q3 of 25 was the worst in terms of loan reductions and asset quality for MFIs. Since then, data shows a gradual improvement in the PAR (Portfolio at Risk) level and portfolio quality.
“There has been a reasonable increase in disbursements in the September quarter as per the quarter-on-quarter data. Things will get better as banks and financial institutions start lending more to MFIs. Banks will be interested in lending to the microfinance sector to achieve their growth targets and priority lending targets for the sector. They may be a little choosy in selecting which MFIs to lend from, but overall lending to MFIs will pick up in the second half of the year 26 improvement,” he said.
He added that going forward, MFIs should remain cautious about repaying borrowers, their existing debts and their income levels. The group mechanism for joint liability will still continue, but Mammen believes that a slightly more individual assessment should be done. We expect asset quality to be stable from now on. “The worst is over for the MFI sector,” he says. END
Published on November 23, 2025
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