Microfinance Loan Crisis: The most deprived section of the society is getting trapped in the web of debt. For such people, micro finance companies are the biggest means of obtaining loans. But the situation has now become such that the existence of the micro finance companies themselves is under threat. There are around 50 lakh people who have taken loans from four or more micro finance companies, which they are now unable to repay. Due to this, the loans of micro finance companies have reached the verge of collapse. This has been revealed in the latest report of credit bureau CRIF HIGH MARK.
The balloon of bad loan can burst any time
The gist of CRIF HIGH MARK’s report is that microfinance institutions in India are in crisis and their bad loan balloon can burst any time. According to the Economic Times report, by November 2024, 50 lakh people had taken loans from four or more microfinance institutions. He had so much loan that he was not in a position to repay it. Due to this, they have become defaulters or are about to become defaulters and with this the entire micro finance sector has been put in trouble. Most of the customers of these microfinance industries come from the deprived segments. A total of eight and a half crore people have taken loans from microfinance institutions. Of these, there are 50 lakh people i.e. six percent of the total. The threat of so many people defaulting has left the financial ecosystem in shock. Because, everything is under a chain. If microfinance companies go bankrupt, the people from whom they have taken loans will also be affected no less.
NPA growth is at 18 month high
The number of people taking loans from four or more places may be up to 50 lakhs, but if we take it to the level of people taking loans from three or more places, then this number is 1 crore 10 lakhs. Which is 13 percent of the microfinance base of Rs 85 million i.e. eight and a half crores. Most of these are also in a position to default. For this reason, the NPA i.e. non-performing asset of microfinance was at its highest in the last 18 months at the end of September. There has been an increase of 11.6 percent.
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