Overview
- DFS Secretary M. Nagaraju called some microfinance interest rates "uncomfortable" and linked them to institutional inefficiencies.
- Loan accounts fell by about 4.5 crore to 11.45 crore by September 30, 2025, while outstanding balances declined to about Rs 3.4 lakh crore from Rs 4.4 lakh crore in March 2024.
- He urged MFIs to lift productivity and cut costs so lower operating expenses translate into reduced borrower rates.
- Nagaraju warned that very high borrowing costs can trigger defaults and raise stressed assets in the system.
- Officials highlighted a large inclusion gap of roughly 300–350 million adults and pointed to NABARD’s SHG digitisation and Grameen Credit Score pilots, with modalities under development following the Union Budget 2025–26.