Sharp Rise in Delinquencies:
- Microfinance non-performing loans (PAR 30+) increased to 6.2% in 2024-25 compared to 2.1% in 2023-24 which shows that the sector is becoming more stressed.
Severe Non-Performing Trend:
- The number of loans outstanding by 90+ days (serious NPAs) rose to 4.8 percent in the same period.
- Bihar Worst Affected:
- Outstanding microfinance loans highest: 57,712 crore (as at March 2025)
- Highest PAR 30 or above: 7.2, above what is in the nation.
- PAR 90+: 4.6% which means that it is more deeply in crisis over repayment.
- Maximum Stress in Rural Areas:
- Rural PAR 30+: 6.4%
- Semi-Urban: 6.1%
- Urban: 6.0%
- Rural PAR 90+: 3.7, which is greater than 3.2 urban/semi-urban.
- Reasons Causes of Rising Defaults:
- Slow economic growth, inflation, agricultural crisis, low wages and earnings, and effects of natural disasters or pandemic crises.
- Impact on Sector:
- More credit risk to the micro financial institutions (MFIs).
- The possible decrease in new lending.
- Increased susceptibility of low-income borrowers.
- Need of the Hour:
- Increased credit evaluation, awareness of borrowers, and management of risk as well as provisions to rural borrowers.
Month: Current Affairs - October 13, 2025
Category: current affairs daily