The recent developmenrt in the microfinance sector surprised many industry participants, including many top MFIs, financial institutions, regulators, and even the government. However, it seems that the challenging phase is now bottoming out, and a potential turnaround is on the cards. The government has also been quick to understand and address the issues. Earlier, there have been media reports that the Budget FY26 may announce a special fund to support MFIs, addressing the critical need for easier access to both debt and equity; however, this did not happen, but the overall thrust was in the right direction, serving the poorest segments of India's population.

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