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Outstanding loan in microfinance 2025
June 20 , 2025
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- Tamil Nadu has the highest average outstanding loan amount per account in the micro finance sector.
- Among the top 10 states, Tamil Nadu has the highest average loan outstanding per account of ₹31,131 followed by West Bengal at ₹30,488.
- Bihar continues to be the largest state in terms of portfolio outstanding followed by Tamil Nadu and Uttar Pradesh in the microfinance sector.
- Tamil Nadu is one of the oldest states with microfinance presence.
- The loan size and loan outstanding in the past was generally a factor of the client vintage and their repayment performance and with every new cycle a borrower would get a higher loan amount.
- So naturally, the client vintage in Tamil Nadu is higher than other states and which explains the higher average loan outstanding.
- Tamil Nadu’s Gross State Domestic Product (GSDP) for the financial year 2024-25 is estimated at ₹17.23 lakh crore.
- Per Capita Income of Tamil Nadu in 2022-23 was ₹2.78 lakh.
- It is 1.6 times the national average of ₹1.69 lakh and was ranked as the fourth-largest state in terms of per capita income.
- This also shows a higher loan absorption capacity of microfinance borrowers in the state, which reflects in the high average loan outstanding per account.
- Still then it is only marginally higher than the All-India average loan outstanding of ₹28,285.
- Among the top 10 states with the highest outstanding loans, four—Bihar, Tamil Nadu, West Bengal and Karnataka have above average outstanding loan amount.
- This is largely driven by a consistent trend of higher disbursements in larger loan sizes in recent months.
- Additionally, the growing credit maturity of the Microfinance Institution (MFI) borrowers in Tamil Nadu has further contributed to this trend.
- The Gross Loan Portfolio (GLP) of the microfinance industry in Tamil Nadu stood at ₹46,689 Crore as on March 31, 2025.
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