MUMBAI: A structural shift is reshaping India’s microfinance sector, with regulated lenders displacing informal sources as borrowing from moneylenders fell to 1% in 2024–25 from 46% in 2011, according to a survey by Microfinance Industry Network and National Council of Applied Economic Research.The survey, which covered 10,342 borrowers across 10 states, shows a maturing market where formal credit has become the primary source of finance for rural and semi-urban households. According to the report, microfinance now serves as the main driver of livelihoods rather than a fallback option.Digital adoption has reshaped disbursement, with nearly 100% of loans now credited directly into bank accounts of around 75 million women borrowers. According to the survey, this has reduced leakages and improved turnaround time, with average loan disbursal completed within six days. However, repayments remain largely cashbased. Only 12% of borrowers use digital modes such as UPI, while 88% continue to repay through cash collections conducted during group meetings. The report said this gap reflects a digital divide, as 61% of borrowers own smartphones but remain reluctant to transact digitally due to low financial literacy and concerns over fraud.The survey finds that microfinance lending is predominantly income-generating rather than consumption-led. Over 75% of loans are used for enterprise activities. According to the data, 48.1% of borrowers used credit to expand existing businesses, 14.4% to start new ventures, and around 13% for agriculture and allied activities. “Microfinance has become a bridge to opportunity and financial independence,” the report said, adding that 78% of borrowers contribute to household income.

Informal Borrowing Collapses 45pp In 14 Yrs

Cost arbitrage remains a key driver of the shift away from informal credit. The average effective interest rate for regulated microfinance is around 33%, far lower than rates charged by informal lenders. According to the report’s qualitative findings, moneylenders charge between 97% and 178% annually and often demand gold as collateral.

MUMBAI: India’s foreign exchange reserves fell sharply by $10.3 billion in the week ended March 27, 2026, taking the total to $688.1 billion, driven largely by a decline in foreign currency assets and gold holdings amid currency market intervention by RBI.The fall was led by foreign currency assets, which dropped by $6.6 billion. These assets, the largest component of reserves, reflect valuation changes in non-dollar currencies such as the euro, pound, and yen, and include the impact of RBI’s intervention to stabilise the rupee. Gold reserves declined by $3.7 billion during the week. The fall in gold, despite its smaller share in total reserves, points to a correction in global gold prices over the period. Other components showed limited movement. Special Drawing Rights rose marginally by $17 million, while the reserve position in the IMF declined by $17 million. These changes did not offset the losses in foreign currency assets and gold.With this week’s decline, forex reserves have dropped for four consecutive weeks by over $40 billion. RBI said India’s forex reserves fell by $11.4 billion last week (ended March 20, 2026) to $698.4 billion. The prior week (ended March 13) saw a $7.1 billion fall to $709.8 billion. This has led to talk among commentators about special measures that could be undertaken to attract foreign exchange flows.The rupee had weakened by over 4% until Wednesday before recovering 1.8% on Thursday after RBI tightened rules to curb speculative bets. The central bank asked banks to unwind long dollar positions. After some lenders shifted these positions to clients, RBI issued another directive on Tuesday asking banks not to offer hedging services in the nondeliverable forward market.

Analysts are also concerned about RBI’s liabilities in the forward market. To defend the rupee, the central bank’s net short dollar forward position is estimated to have hit $77 billion in Feb 2026, and may have risen further in March. While this preserves immediate spot reserves, it creates a large future dollar liability. Maturing contracts can drain reserves and tighten liquidity. Despite the recovery on Thursday, dealers expect volatility to persist next week following the escalation of conflict.

HYDERABAD: The Centre’s push to ensure 10,000 geographical indication (GI)-tagged products by 2030 seems to have moved into a higher gear, with the total number of GI applications finally crossing the 2,000 mark to reach 2,013 as on April 2, 2026.While Kashmir Kagzi Badam was the 2,000th application to be filed on April 2 this year, Sikkim’s Chyabrung was the 2,013th application to be filed on the same day. Since April 1, 2025, when Khavda pottery of Kutch became the 1,482nd application to be filed, the highest number of GI applications, at 510, have been filed in FY25-26 alone, the highest in a single fiscal since the first GI for Darjeeling tea was filed in Oct 2003.In fact, if the past two fiscal years saw over 780 GI applications being filed, just the past three days saw 21 GI applications being filed. Till date, as many as 724 GI-tagged products have been registered across the country. GI experts attributed the acceleration in application filing to the govt push that involved slashing the fees from Rs 5,000 to Rs 1,000 last year.

NEW DELHI: India’s vast informal manufacturing sector has seen jobs stay flat for nearly a decade, while the formal manufacturing sector has seen an increase, marking a sharp divergence in the growth trajectory of the two segments.An analysis of the latest unincorporated enterprises survey released last month showed that 3.5 crore people were employed in informal manufacturing in 2025, as compared to 3.6 crore in 201516, while the number of enterprises rose to 2.1 crore from 2 crore.In contrast, data from the latest annual survey of industries (ASI), which tracks the formal manufacturing sector, showed that a little under 2 crore were employed in 2023-24, up 37% over 201516 (see graphic).Santosh Mehrotra, visiting professor at the University of Bath, said that in the past few years, the organised sector has gained at the expense of the unorganised sector, but added that this does not imply formalisation of the economy. “Instead, it reflects the growing stratification of the economy, wherein a relatively small formal sector is witnessing a spurt in productivity and growth and the vast informal sector which is the mainstay of the vast population is facing stagnation,” he added.The divergence between the two sectors is also visible in the worker’s earnings.Between 2015-16 and 2025, in real terms, the emoluments per hired worker in informal manufacturing enterprises grew at a compound annual growth rate (CAGR) of 2.1% to Rs 72,172 from Rs 59,806.

In contrast, total emoluments paid to workers in real terms in the formal manufacturing sector grew at 4.5% CAGR between 2015-16 and 2023-24. The net profit in the formal manufacturing sector, meanwhile, grew at 4.4% CAGR during this period.