Tightening microfinance loan norms to defuse risk for overleveraged borrowers: S&P Global Ratings

Stricter regulations and underwriting standards in the Indian microfinance sector are expected to slow down growth for lenders while reducing risk for borrowers, according to S&P Global Ratings. New rules aim to address asset quality issues caused by borrowers relying on new loans to repay old ones. Self-regulatory measures introduced will further cap lending from August 2024.