Context: The Uttar Pradesh microfinance industry, which provides credit to bottom-of-the-pyramid borrowers, including 5.3 million women, is currently estimated at ₹32,500 crore.
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- In the quarter ending September 30, 2025, microfinance institutions (MFIs) recorded a growth of nearly 4%, with quarterly lending amounting to ₹7,258 crore.
- However, the current outstanding stood at ₹32,584 crore, marking a 20% decline compared to over ₹40,000 crore at the end of September 2024.
- According to UP Microfinance Association (UPMA) Chief Executive Officer Sudhir Sinha, the state’s microfinance sector has seen a year-on-year contraction, mirroring a similar trend observed across other states.
- He added that the industry is now showing “green shoots of growth,” as reflected in the recent quarterly uptick of 4%, expressing optimism that the sector will maintain this momentum.
- Meanwhile, the average ticket size of microfinance loans in Uttar Pradesh has risen to ₹57,822 in September 2025, up from ₹48,528 during the same period last year, indicating a positive growth trajectory.
- As per the latest UPMA report, NBFC-MFIs continue to dominate microfinance lending in the state, contributing 47% of the total advances. They are followed by private banks, small finance banks (SFBs), and NBFCs, which together make up the remaining share of the lending portfolio.
- Overall, while the sector witnessed a contraction over the past year, recent trends suggest a gradual revival in Uttar Pradesh’s microfinance industry, driven by renewed lending activity and increasing loan sizes.
