Multiple loans leading to debt trap? Amid rising microfinance defaults, what to do if you’re struggling to repay your loan
At the heart of the issue is overlapping credit exposure. The data revealed that around 5 million microfinance borrowers, who constitute around 6% of the total borrower base as of November 2024, have taken loans from four or more lenders. Data from the Reserve Bank of India (RBI) also showed that the share of borrowers