A funding crunch and mounting stress in short cycles in India's microfinance sector are forcing a growing number of smaller lenders to retreat from direct lending and turn into business correspondents for banks, signalling a structural shift in an industry built on the joint-liability group lending model. As access to bank funding and fresh equity dries up, many practitioners are opting for off-balance-sheet growth, while questioning the relevance of a model pioneered by Chandra Shekhar Ghosh and Vijay Mahajan, especially when borrowers have multiple formal credit options and rising aspirations. "I have never been better," said Alok Biswas, who built Janakalyan Fincare in August 2025 for working as business correspondent of banks.