CreditAccess Grameen, the country’s largest microfinance lender, reported healthy loan book growth and improved asset quality, driven by better collections across states except Karnataka.
In an interim business update for February, the Bengaluru-based microlender said its portfolio at risk (PAR) for loans overdue by 15 days or more, excluding Karnataka, improved from 1.06% in December 2024 to 0.55% in February 2025. However, including Karnataka, the PAR 15 ratio rose from 0.95% to 1.02%, with Karnataka alone seeing a sharp increase from 0.72% to 2.02% over the same period.
“Increase in delinquencies (in Karnataka) during January and early February 2025 was due to various operational ambiguities in anticipation of the ordinance, on-ground sensitivities, and collections being limited to centre meetings while avoiding house visits,” the company said.
The Karnataka government last month promulgated the Karnataka Micro Loan and Small Loan (Prevention of Coercive Actions) Ordinance, aimed at protecting borrowers from coercive recovery practices. While the ordinance primarily targets unorganised lenders, analysts expect it will impact regulated microfinance lenders like CreditAccess by disrupting credit discipline and repayment behaviour.
The company reported a decline in X-bucket collection efficiency in Karnataka from 99.4% in December 2024 to 95.1% in early February 2025, before recovering to 98% by the last week of February. “While the majority of borrowers continued to repay on time at centre meetings, certain borrowers delayed repayments,” it said.
The company’s gross loan portfolio (GLP) stood at Rs 25,395 crore in February 2025, up from Rs 24,810 crore in December 2024. Karnataka accounted for Rs 8,010 crore, while the rest of the states contributed Rs 17,384 crore.
“The situation is expected to gradually normalise over 1-2 months,” the company said. Shares of CreditAccess Grameen closed 6% higher at Rs 979.80 on the NSE.