Microfinance

The proposed guarantee cover is expected to be larger than the ₹7,500 crore package offered during the pandemic. To be managed by the National Credit Guarantee Trustee Company, it will underwrite lending risks for banks, covering defaults caused by factors outside the control of small borrowers.

Pressure is spreading beyond unsecured microfinance into what was once considered a relatively stable asset class, but lenders and analysts offer differing reasons for this.

Microfinance sector is witnessing a slow recovery marked by moderating bad loan ratios and better collections. However, profitability remains pressured as major lenders focus on secured loans to manage risk. The sector's path to growth is further constrained by uneven recovery.

The US's 50% tariff on Indian imports is a wake-up call for the country's MSMEs. While market diversification is necessary for long-term resilience, a covid-style relief package aimed at preventing business closures and saving jobs is urgently needed.

After weak recoveries and high delinquencies post-pandemic, the lender is using its flagship business to shore up subsidiaries.

Federal Bank may be trailing the Nifty Bank index, but analysts say it’s the safest midsized lender, and primed for strong growth.

Spandana’s AUM fell 43% in FY25 amid rising credit stress and cautious lending. After heavy write-offs, it plans 20% AUM growth in FY26, supported by stronger collections and tighter borrower controls.