The persisting stress in the microfinance sector continued to weigh on loan originations in the December quarter (Q3FY25), with a 35 per cent year–on–year (Y-O-Y) drop in value and 42 per cent in volume, according to CRIF data. “The contraction likely arises from rising delinquencies, borrower over-leverage across lenders, and collection inefficiencies, straining asset quality and prompting cautious growth,” the report said. Data shows the total disbursal amount dropped from Rs 97,400 crore in Q3FY24 to Rs 63,440 crore in Q3FY25. In the September quarter, it was Rs 69,927 crore.