Weak rains clouds recovery in Rs 3.3 lakh crore microfinance sector

India's microfinance sector, with a market worth ₹3.30 lakh crore, is encountering credit risk hurdles. Key factors include inconsistent rainfall and drought in critical states such as Karnataka and Maharashtra, which deeply influence the agricultural economy tied to rural borrowers. In response, some institutions are exercising caution by closely monitoring high-risk areas, yet the lack of loan protection further exacerbates the financial risks involved.