New Delhi, Feb. 26 -- India's microfinance sector is approaching an "inflection point," said JM Financial Institutional Securities, citing a revival in disbursement growth and early signs of asset quality stabilisation, even as overall portfolios continue to consolidate.

In its latest thematic report on India NBFCs, the brokerage noted that year-on-year (YoY) disbursement growth turned positive in 3QFY26 for the first time after five consecutive quarters of decline.

Disbursements rose 9.2 per cent quarter-on-quarter (QoQ) and 5.2 per cent YoY, supported by higher average ticket sizes (ATS) and a rebound in loan volumes.

The report highlighted that the recovery in disbursements was primarily led by NBFC-MFIs, which recorded 10 per cent ...