CreditAccess Grameen faces rising delinquencies in Karnataka & TN

CreditAccess Grameen

CreditAccess Grameen saw a rise in its portfolio at risk (PAR) levels in Karnataka and Tamil Nadu last month due to regulatory uncertainties and weather-related disruptions, according to the company's  interim business report for February 2025.

Karnataka witnessed the highest surge, with the PAR 0+ (due for more than 0 days)  climbing from 4.3 to 7.9 percent, while PAR 90+ (loans overdue by 90 days or more) nearly doubled from 1.2 to 2.1 percent. Tamil Nadu’s (PAR 90+) increased from 8.9 to 9.3 percent, reflecting the impact of a new state ordinance and the aftermath of heavy rains.

The ordinance, effective February 12,  primarily targeted the predatory practices of unregistered lenders but led to operational disruptions for regulated microfinance lenders such as CreditAccess Grameen.

According to the report, the situation is expected to gradually normalise over the next one to two months.

However, despite these setbacks, collection efficiency is showing signs of recovery, with CreditAccess implementing targeted measures to stabilise asset quality.

In the report, the company disclosed that its loan portfolio had grown to Rs 25,395 crore, up from Rs 24,810 crore in December 2024. And over 1.5 lakh new borrowers were added in January and February.

The X bucket collection efficiency (collection from customers with nothing overdue), excluding Karnataka, stood at over 99.5 percent in February.

Other states such as Bihar and Maharashtra also faced moderate increase in delinquency rates.

The company has ramped up collection efforts, increased borrower engagement, and strengthened its workforce, with employee numbers rising from 19,333 in December 2024 to 20,265 in February 2025.