New Delhi, March 7 -- Non-banking financial companies with microfinance arms (NBFC-MFIs) in India are increasingly expanding into non-microfinance credit segments such as MSME loans, loan-against-property (LAP), affordable housing and vehicle financing as part of a strategic shift to diversify risk and reduce portfolio concentration.

Industry participants say that evolving regulatory norms and socio-political factors in key states have encouraged the move away from a sole reliance on traditional microloans, reported the Business Standard.

Several state governments, including Bihar, Karnataka and Tamil Nadu, have introduced legislation to strengthen oversight and curb coercive recovery practices, which has influenced lender behaviour.

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