Bajaj Finance on July 24 reported a microfinance loans of Rs 1,556 crore in the first quarter of the current financial year after separating microfinance business from Rural B2C Loans.
This is the first time when the company is reporting a microfinance loans portfolio as a business segment in Q1. Prior to this, microfinance business was part of Rural B2C loans of the company, and the currently, the MFI business is sourced from MFI branches.
As per investor presentation, the company has 337 MFI branches, and in the reporting quarter, the company is added 4 new standalone branches.
In 2023, Sanjiv Bajaj, Chairman & Managing Director Bajaj Finserv, had planned to enter micro finance segment by 2025. Bajaj said this at the All India Management Association’s 8th National Leadership Conclave.
On the asset quality front, the gross non-performing asset (NPA) of the company in absolute terms stood at Rs 17 crore as on June 30, 2025, and net NPA stood at Rs 5 crore, as per investor presentation. The provision coverage ratio on MFI loans stood at 73 percent.
In the last few quarters, microfinance sector has been reeling under stress with higher NPAs and lower collection efficiencies. In order to curb this, the self-regulatory organization (SRO) of microfinance institutions has put in place guardrails on the sector.
Additionally, Karnataka government earlier this year had approved the Karnataka Microfinance (Prevention of Coercive Actions) Ordinance, 2025, which seeks to curb coercive practices by microfinance institutions (MFIs) in the state.
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