The microfinance credit pool in Uttar Pradesh grew by nearly 10% year-on-year (Y-o-Y), reaching ₹40,840 crore by the end of September 2024. This significant increase highlights the growing demand for grassroots lending across the state.
In September 2023, the portfolio stood at ₹37,250 crore, indicating a steady rise in microfinance activity over the past year.
Eastern UP Leads in Microfinance Lending
Eastern Uttar Pradesh accounted for 46% of the total microfinance lending, leading the charge in the state. Western UP followed with 40%, while Central UP contributed 14% to the overall portfolio.
According to Sudhir Sinha, CEO of the Uttar Pradesh Microfinance Association (UPMA), microfinance institutions (MFIs) lent ₹7,584 crore in the July-September 2024 quarter alone.
“Microfinance caters to low-income borrowers, providing essential institutional credit to individuals and self-help groups (SHGs) in both rural and urban areas,” Sinha stated.
Growth in Average Loan Size Reflects Rising Demand
The average ticket size of microfinance loans in Uttar Pradesh saw a significant 15% increase, rising from ₹43,484 in September 2023 to ₹48,471 in September 2024. This upward trend showcases the growing trust and traction of MFIs in the state.
Diverse Lending Institutions Supporting Growth
Microfinance loans in UP were provided by a variety of lending institutions. These include commercial banks, small finance banks (SFBs), non-banking financial companies (NBFCs), traditional MFIs, not-for-profit MFIs, and NBFC-MFIs. This broad network ensures accessibility for borrowers from diverse backgrounds.
Microfinance continues to play a crucial role in empowering individuals at the grassroots level by providing them with the resources needed for financial stability and growth.
