The Indian microfinance lender CreditAccess Grameen continues to grow its loan portfolio and increase asset quality outside of Karnataka due to new regulatory hurdles in that state.

The February 2025 report from CreditAccess indicated that its overdue loan portfolios (PAR) other than Karnataka fell from 1.06% to 0.55% between December 2024 and February 2025. The overall PAR 15 ratio for Karnataka increased from 0.95% to 1.02% although the individual state rate rose from 0.72% to 2.02%. The Karnataka Micro Loan and Small Loan (Prevention of Coercive Actions) Ordinance along with borrower responses to organizational changes triggered the portfolio at risk to rise in the Karnataka region.

Regulated entities such as CreditAccess alongside unregulated lenders are impacted by the ordinance which is intended for unorganized lenders because it changes borrowers’ credit discipline and payment practices. The X-bucket collection efficiency of the lender in Karnataka registered a decrease from 99.4% in December 2024 to 95.1% in early February 2025 after which it restored to 98% by the month’s conclusion.

The gross loan portfolio (GLP) of CreditAccess increased from Rs 24,810 crore to Rs 25,395 crore in February 2025 while Karnataka’s sector accounted for Rs 8,010 crore. The microlender predicts operational challenges will return to normal during the following one to two months. During this period the company stock value on the NSE gained 6% and reached Rs 979.80.

The performance update demonstrates CreditAccess Grameen’s stability alongside the acquisition of new state regulations which impact India’s continuously evolving microfinance sector.