The most deprived section of the society is getting trapped in the web of debt. For such people, micro finance companies are the biggest source of getting loans. But the situation has now become such that the existence of 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, this loan of micro finance companies has reached the verge of sinking. This has been revealed in the latest report of credit bureau CRIF HIGH MARK.
The balloon of bad loans can burst anytime
The gist of the report of CRIF HIGH MARK is that microfinance institutions in india are in crisis and their balloon of bad loans can burst anytime. According to the report of Economic Times, by november 2024, 50 lakh people had taken loans from four or more microfinance institutions. They had so much loan that they were not in a position to repay it. Due to this, they have become or are about to default and with this the entire micro finance sector has been put in crisis. Most of the customers of these microfinance industries come from the deprived segment. A total of 8.5 crore people have taken loans from microfinance institutions. Of these, 50 lakh people are six percent of the total. The danger of so many people defaulting has put the financial ecosystem in shock. Because, everything is under a chain. If microfinance companies sink, then those 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 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% of the microfinance base of 85 million i.e. 8.5 crores. Most of these are also in a position to default. Due to this, the NPA i.e. non-performing asset of microfinance was at the highest in the last 18 months at the end of September. It has increased by 11.6%.
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