India's microfinance sector struggles as defaults surge in pandemic

India's microfinance sector struggles as defaults surge in pandemic

Mumbai, India. Photo by Smith Mehta on Unsplash

Small loan specialists in India that typically cater to people without bank accounts are facing a jump in pandemic-related defaults that could force some of them out of business, industry experts warn.

Loans overdue by 30 days are expected to reach 14-16% of all so-called microfinance loans in the immediate aftermath of the second COVID-19 wave sweeping India, said Krishnan Sitaraman, senior director at credit rating agency CRISIL.

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