Three-lender cap rule for microfinance from April 1, further stress likely in short term

From April 1, microfinance lenders are set to cap borrowers' access to a maximum of three lenders, aiming to prevent overleveraging. This rule, while causing short-term pain, is expected to bring long-term credit discipline. Over 4.5 million borrowers currently engage with more than three lenders, leading to potential defaults and asset quality deterioration for lenders.