The microfinance sector in India has experienced a notable recovery in Q4FY26, with its gross loan portfolio increasing by 3.2% quarter-on-quarter to reach ₹3.31 trillion. This marks the first growth after eight consecutive quarters of decline. The recovery is attributed to higher loan originations, larger ticket sizes, and improved asset quality, as reported by CRIF High Mark. However, on a year-on-year basis, the sector still faces a decline of 13.2%. The Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) emerged as the key growth driver, while banks' share in the portfolio outstanding decreased from 32.6% to 26.4% over the past year. Additionally, the average loan ticket size rose by 18.3% year-on-year to ₹61,500, and the number of loans disbursed increased significantly from 10.27 million in Q3FY26 to 12.61 million in Q4FY26. The largest share of loan origination value came from loans in the ₹50,000-80,000 category, accounting for 41.8% of total origination value. Portfolio at risk (PAR) metrics also improved, with PAR 180+ decreasing to 16.3% from 17.3% in the previous quarter.