Impact of India’s new personal insolvency and bankruptcy regime

This study sought to understand the impact of the new regulations on the microfinance sector through the lens of different categories of stakeholders – customers, leadership at microfinance institutions (MFIs) and intermediating staff.

Debt distress among microfinance borrowers is on the rise, sufficiently so that it may be characterised as a crisis for the sector. This is driven by factors across the supply- and demand-sides, as well as factors inherent in the nature of the credit cycle, where periodic booms and busts have been present throughout history. To address this, we propose two sets of recommendations for the regulator: a set of recommendations that can be initiated in the short-term and another set that can be initiated over the medium-term.

The Government of India called for pre-budget consultations in early January 2025. Dvara Research was one of the invitees, and we are once again grateful to policy makers for reposing trust in our work. In the past as well, Dvara Research has been a partner and advisor of choice for key policy-making bodies in the country.

This blog presents key insights from the second round of the survey report, NAFIS 2021-22, and finds that the rural households’ investment portfolio continues to be dominated by physical assets, which is in contrast with the predominance of formal debt on the liabilities side of the household balance sheets.

This chapter emphasises the realities of the sector that create a feedback loop, where lenders are incentivised to over-lend and borrowers to over-borrow, until crisis intervenes as a necessary and often tragic correction

For two decades, India has doubled down on the policy prescription of providing financial ‘last-mile access’ to its rural and poor citizens. Has the effort succeeded? It depends on who you ask.