35 | Annual Report | 2024-2025 • Launch of SOCIAL, our internal employee communication platform, • Recognition as 35th among India’s Top 100 Best Companies to Work For 2024 by the Great Place to Work® Institute, • Introduction of e-KYC via Aadhaar for faster onboarding, • ISO 9001:2015 certification from BSI for quality excellence, • A multilingual website and IVR system in over eight languages, • Receipt of the Coaching Culture Award, • SKOCH Order-of-Merit for our proprietary Credit Scoring Model – Nirnay, and • SKOCH Awards for our High Potential & Leadership Development Programme • Recognised at the prestigious CRIF Data Excellence Awards 2025 for ‘Data Excellence’. Other key highlights include the solarisation of our branches, mainstreaming of our MEL (Micro Enterprise Loan) and ArohanPrivilege Businesses, and the revival of our operations in the North Eastern geography of India. As we step into the new fiscal year, the message is clear: the environment is evolving, and so must we. We remain committed to our mission, values, and the communities we serve—with resilience, innovation, and purpose. MICROFINANCE SECTOR Opportunities: India’s microfinance sector is poised for strong, sustained growth, with the market projected to touch INR 6.68 Lakh Cr by 2033, clocking a CAGR of 7.3%. Backed by robust policy support, targeted rural development schemes, and expanding financial product offerings, the sector presents multiple high-potential opportunities. Flagship initiatives like PMJDY, MUDRA, the SHGBank Linkage Programme, and MSME-focused Budget measures continue to drive demand, particularly in underserved geographies. The recent RBI CRR cut by 100 bps over four equal tranches will help the NBFC-MFIs with an opportunity to borrow funds at a reduced cost. This move is expected to ease liquidity pressures and lower the overall cost of borrowing for the microfinance companies. In addition, the RBI’s relaxation of the qualifying asset ratio to 60:40 will enable NBFC-MFIs to broaden their product offerings. This adjustment allows them greater flexibility in diversifying their portfolios, which can be crucial for business growth and sustainability in the long term. The sector’s inclusion under priority sector lending ensures access to low-cost capital, creating a stable funding environment for MFIs. On the digital front, adoption of AI, UPI integrations, and digital lending platforms is accelerating operational efficiency and widening service delivery, with mobile-based transactions now playing a pivotal role. MFIs are also diversifying beyond traditional microcredit, venturing into micro-enterprise loans, MSME financing, insurance, pensions, and remittances broadening revenue streams while deepening financial inclusion. With the sector contributing 2–3% to India’s GVA and supporting 1.3 Cr jobs, the economic footprint is both significant and expanding. At the same time, existing structural challenges open avenues for reform. Strengthening borrower verification through Aadhaar-based e-KYC or a unified CKYC system, mandating realtime credit bureau reporting, and investing in certified financial inclusion training for MFI staff can enhance credit quality, data reliability, and customer trust. Improving governance through transparent pricing, board-level oversight, and risk-based underwriting can further attract institutional capital. There is also a clear case for advancing financial literacy through national awareness campaigns to reduce dependence on informal credit channels. Finally, scaling borrower protection through climate-resilient financial products and stronger legal safeguards against predatory lending can build long-term sectoral resilience. With the right mix of regulatory reform, digital innovation, and capacity-building, India’s microfinance industry is well-positioned to deliver both inclusive growth and investor value over the next decade. Threats India’s microfinance sector, which services close to 80 mn borrowers, remains a cornerstone
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