That about 90-95% of borrowers at the bottom of the pyramid have paying back loans however provides comfort that the dues would be paid fully despite delays.


With the gradual opening up of the Indian economy, collections picked up pace since the September and December quarter but have slowed in the last couple of months. For entities having significant exposure to urban regions and the poll-bound states of West Bengal and Assam, collections are lower at 80%-90% of pre-Covid levels, while the rates have rebounded to 90%-95% for others.

The microfinance portfolio for Indian banks continues to be a pain point, with collection efficiencies again plateauing around 80% and lenders forecasting at least three quarters of status quo before the gauge heads further north. With nine states including West Bengal and Assam going into elections, politics remains an asset quality overhang for the sector with Rs 2.3 lakh crore of loans to repay. “This sector needs more hand holding and

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