Uttar Pradesh Govt Microfinance Portfolio Soars to ₹32,500 Crore

After a year of contraction, Uttar Pradesh’s microfinance industry is witnessing signs of recovery, driven by stronger lending activity and higher average loan sizes. 

The sector, which primarily supports low-income women borrowers, recorded total lending of ₹7,258 crore in the quarter ending September 2025, signalling renewed momentum in financial inclusion and credit growth across the state.

UP Govt Microfinance Lending Sees 4% Quarterly Uptick 

The overall microfinance portfolio in Uttar Pradesh stood at ₹32,584 crore at the end of September 2025, serving around 5.3 million borrowers. While this figure reflects a 20% year-on-year decline from ₹40,000 crore in 2024, the quarter saw a 4% sequential uptick in new disbursements. 

The average loan size has also grown to ₹57,822, up nearly 19% from the previous year, highlighting rising borrower demand and confidence. Sudhir Sinha, CEO of the Uttar Pradesh Microfinance Association (UPMA), stated the sector is showing green shoots of growth again. 

NBFCs Have 47% Share in UPMA’s Lending Portfolio 

Non-Banking Financial Company Microfinance Institutions (NBFC-MFIs) remain the largest contributors, accounting for 47% of total lending, followed closely by private and small finance banks. Regionally, eastern Uttar Pradesh leads with a 46% share, while western and central regions contribute 40% and 14% respectively. 

The UPMA noted that the 30-day delinquency rate, a key measure of overdue loans, has declined, reflecting healthier repayment behaviour. NBFCs in particular reported the most stable portfolio quality, indicating stronger collection mechanisms and improved borrower discipline.

Read More: Government Launches Sahakar Digi Pay and Sahakar Digi Loan Apps to Strengthen Urban Cooperative Banks!

Conclusion

With lending on the rise and portfolio quality improving, Uttar Pradesh’s ₹32,500 crore microfinance sector is poised for steady expansion. The renewed activity, coupled with digital innovation and disciplined lending practices, signals a stronger and more resilient foundation for financial inclusion in the state.

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