New Delhi, June 30 -- India's microfinance industry is consolidating around materially stronger credit quality, with the 30-days-past-due (DPD) delinquency rate falling sharply to 2.1 per cent as of May 2026, down from 6.3 per cent a year earlier, even as the overall sector continued to shrink in size, according to the latest Microfinance Insights report released by Equifax.

The total industry portfolio outstanding stood at Rs 3,33,110 crore as of 31 May 2026, a 9 per cent year-on-year (YoY) contraction from Rs 3,67,897 crore a year earlier. The decline reflects a deliberate shift by lenders toward tighter underwriting and risk-calibrated growth rather than volume expansion. The number of active loans across the industry fell more sharpl...