Loan defaults among microfinance borrowers have seen a significant increase, with a rise in the portfolio at risk. In October, this figure increased by 130 basis points to 17.5%, following a substantial increase from March to September.

Delinquency rates in the microfinance sector are also on the rise, with 1-30 days past due loans climbing month-on-month to 2.4%, marking an increase since March. Loans overdue by 31-90 days increased to 2.9%, reflecting a rise from earlier in the year. Loans overdue for more than 90 days saw a month-on-month increase to 12.2%, following a rise during the March to September period.

The states of Bihar, Tamil Nadu, Orissa, Uttar Pradesh, and Jharkhand reported the highest month-on-month increases in 1-90 days past due loans, collectively accounting for 48% of the microfinance institution market share.