Indian Small Finance Banks Project Improved Asset Quality Through 2027

Small finance banks' asset quality to improve, GNPA to drop by 120 basis points by March 2027: Crisil

Small finance banks anticipate improved asset quality this financial year. Gross non-performing assets are projected to decline significantly by March 2027. This improvement stems from microfinance portfolio recovery and stable non-microfinance growth. Tighter underwriting practices have strengthened borrower selection in microfinance portfolios. Borrower over-indebtedness caused past credit stress in microfinance books.