The microfinance sector in Uttar Pradesh (UP) witnessed robust growth, with the credit pool rising by nearly 10 per cent Year-on-Year (Y-o-Y) to reach Rs 40,840 crore at the end of September 2024, compared to Rs 37,250 crore in September 2023. This surge underscores the increasing reliance on grassroots lending as a critical financial lifeline.
Regionally, Eastern UP emerged as the leader, contributing 46 per cent to the state’s total microfinance portfolio, followed by Western UP with 40 per cent and Central UP with 14 per cent.
According to Sudhir Sinha, Chief Executive Officer (CEO), Uttar Pradesh Microfinance Association (UPMA), microfinance institutions (MFIs) disbursed a substantial Rs 7,584 crore during the July-September 2024 quarter. He stated, “Microfinance or micro-credit provides essential institutional lending to low-income individuals and self-help groups (SHGs) across rural and urban areas, helping to empower the bottom-of-pyramid borrowers.”
The sector’s growth is further reflected in the rise of the average ticket size of microfinance loans in UP, which jumped by nearly 15 per cent from Rs 43,484 in September 2023 to Rs 48,471 in September 2024. This trend highlights the increasing traction of MFIs in the state.
The microfinance loans were extended by a diverse range of lending institutions, including commercial banks, small finance banks (SFBs), non-banking financial companies (NBFCs), MFIs, not-for-profit MFIs and NBFC-MFIs.
The continued expansion of microfinance in UP reinforces its role as a vital tool for financial inclusion, enabling economic upliftment at the grassroots level.
