Microlenders are facing increasing stress on their books, with some reporting disappointing earnings for the second consecutive quarter. The Reserve Bank of India (RBI) has been closely examining the unsecured lending sector, which has experienced rapid growth in recent times.

In response to concerns about the unchecked expansion of unsecured loans, the RBI implemented measures in 2022 to create a more balanced environment for microlenders. However, recent developments suggest that these measures may be exposing vulnerabilities within the sector, as financial performance continues to decline.

It is advised that investors closely monitor the situation as the regulatory pressures reshape the landscape for microlending. The challenges faced by microlenders could have significant implications for investment strategies in this segment.