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Lending from microfinance institutions constituted 43 per cent of the ₹3.3 lakh crore of the loan portfolio balance in June 2026, according to data from Transunion CIBIL.

This share stayed at around 36 per cent to 38 per cent between June 2022 to June 2025, making this the most significant increase in five years. The only other category which borrowers preferred to take their loans from was NBFC, as its share increased to 15 per cent from 10 per cent in four years ago.

Small Finance Banks (SFBs) as a share of total portfolio stayed at around 16 per cent. Share of banks in total portfolio reduced significantly in the past three years. The share was 27 per cent in June 2026, down from 34 per cent in June 2025 which itself was lower than 35 per cent in June 2024. Between June 2019 to June 2024, the preference for banks increased.

The increase in the share of MFIs comes despite a fall in overall number of credit active borrowers. The number of credit active borrowers ranged between 6.6 to 7.7 crore in between June 19 to June 2024. The total number of active borrowers increased to a six-year high of 8.6 crore. The number of active borrowers reduced to 6.5 crore in June 2026.

The number of credit active borrowers shifted to Tamil Nadu from northern states like Bihar and Uttar Pradesh in the last seven years, said CIBIL in the report.

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