**Executive Summary**
This document is a response from the Minister of State in the Ministry of Finance to a Lok Sabha unstarred question regarding microfinance companies in Rajasthan. It addresses standards for operating microfinance companies, interest rates, complaints, and loan disbursement details. The answer references Reserve Bank of India (RBI) guidelines and data collected by Self-Regulatory Organizations (SROs) like Sa-Dhan and MFIN.
**Key Points / Main Content**
* **Microfinance Company Standards:**
* As per RBI guidelines, a Non-Banking Financial Company - Microfinance Institution (NBFC-MFI) must deploy a minimum of 60% of its total assets towards "microfinance loans."
* A microfinance loan is a collateral-free loan given to a household with an annual income up to ₹3,00,000.
* **Interest Rate Regulations:**
* RBI guidelines deregulate interest rates, but Regulated Entities (REs) must have a Board-approved policy covering:
* A well-documented interest rate model.
* Delineation of interest rate components.
* The range of spread for each component.
* A ceiling on interest rate and other charges.
* Interest rates and other charges must not be usurious and are subject to RBI supervisory scrutiny.
* **Complaint Handling:**
* RBI does not maintain information sought regarding complaints and their resolution.
* SROs like Sa-Dhan and MFIN collect data on complaints.
* MFIN reported no complaints related to high interest rates in their Customer Grievance Redressal Mechanism (CGRM) in the last year (Dec 2024 - Nov 2025)
* Sa-Dhan reported one complaint related to higher interest rates during July-September 2025, which was resolved within a month.
* **Dungarpur-Banswara Districts:**
* RBI reports 13 and 12 NBFC-MFIs operating in Dungarpur and Banswara districts, respectively.
* RBI does not maintain information on complaints about excessive interest.
* MFIN reported no complaints about excessive interest or coercive recovery practices in these districts from Dec 2024 to Nov 2025.
* **Loan Disbursement:**
* Data provided by MFIN shows state-wise loan disbursement by NBFC-MFIs in FY 2023-24 and FY 2024-25 (amounts listed in crores).
**Impact Analysis**
**RBI**
* **Impact:** The RBI is responsible for setting the guidelines for operating microfinance companies, deregulating interest rates, and ensuring that interest rates are not usurious.
* **Action Required:** Ensure that REs have Board-approved policies regarding pricing of microfinance loans, and that interest rates and other charges are not usurious and are subject to supervisory scrutiny.
**Microfinance Companies (NBFC-MFIs)**
* **Impact:** They must comply with RBI regulations, including the 60% asset deployment requirement and interest rate policy guidelines.
* **Action Required:** Adhere to RBI guidelines for NBFC-MFIs, implement Board-approved interest rate policies, and manage complaints effectively.
**Borrowers/Households with income up to ₹3,00,000**
* **Impact:** They are the recipients of microfinance loans, which are collateral-free and intended to support their financial needs.
* **Action Required:** Be aware of the interest rate policy, their rights regarding fair interest rates and complaint resolution mechanisms.
**SROs (Sa-Dhan and MFIN)**
* **Impact:** These organizations are responsible for collecting data on complaints against microfinance companies.
* **Action Required:** Continue to collect data on complaints, maintain a grievance redressal mechanism, and collaborate with RBI to address concerns effectively.
Key Entities Referenced
Reserve Bank of India (Non-Banking Financial Companies – Microfinance Institution) Directions, 2025: Sets the regulatory framework and definition of Non-Banking Financial Company - Microfinance Institutions (NBFC-MFIs).
Reserve Bank of India (RBI): The regulator of microfinance companies, whose guidelines are referenced for interest rate deregulation and other supervisory matters.
Microfinance Industry Network (MFIN): An organization that collects data on complaints against microfinance companies and operates a customer grievance redressal mechanism.
Rajasthan: State where details related to microfinance companies' operations, loan interest rates, and complaints are being sought.
Sa-Dhan: A Self-Regulatory Organization (SRO) of the microfinance sector that collects data on complaints.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 2499
ANSWERED ON MONDAY, 15th DECEMBER, 2025/ 24 AGRAHAYANA, 1947 (SAKA)
Microfinance Companies in Rajasthan
†2499. SHRI RAJKUMAR ROAT:
Will the Minister of FINANCE be pleased to state:
a) whether there are any standards or criteria for operating the microfinance companies in the country,
if so, the details thereof;
b) the maximum interest rate at which microfinance companies are providing loans in Rajasthan;
c) the number of complaints received against these microfinance companies for charging higher
interest rates for loans along with the procedure for filing complaints in this regard;
d) the details of the number of complaints resolved in the said State, district-wise;
e) the number of microfinance companies operating in Dungarpur-Banswara districts along with the
number of complaints received regarding charging interest above the prescribed limit and mental
harassment of people for non-repayment;
f) the number of complaints resolved out of the above in the said districts; and
g) the details of the amount of loan disbursed by the microfinance companies in the country, State/year-
wise?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
a) In terms of paragraph 8(3) of the Reserve Bank of India (Non-Banking Financial Companies –
Microfinance Institution) Directions, 2025, a Non-Banking Financial Company – Microfinance
Institution (NBFC-MFI) means a non-deposit taking NBFC which has a minimum of 60 percent of its
total assets (netted off by intangible assets) deployed towards “microfinance loans” on an ongoing
basis. Further, a microfinance loan means a collateral-free loan given to a household having annual
household income up to ₹3,00,000. For this purpose, the household shall mean an individual family
unit, i.e., husband, wife and their unmarried children.b) As per Reserve Bank of India’s (RBI’s) guidelines, interest rates are deregulated and Regulated
Entities (REs) shall put in place a Board-approved policy regarding pricing of microfinance loans
which shall, inter alia, cover the following:
1. A well-documented interest rate model / approach for arriving at the all-inclusive interest rate.
2. Delineation of the components of the interest rate such as cost of funds, risk premium and
margin, etc. in terms of the quantum of each component based on objective parameters.
3. The range of spread of each component for a given category of borrowers.
4. A ceiling on the interest rate and all other charges applicable to the microfinance loans.
Further, it has also been prescribed that interest rates and other charges / fees on microfinance loans
should not be usurious and these shall be subjected to supervisory scrutiny by the Reserve Bank.
c) and d) Information sought is not maintained by RBI.
However, Self-Regulatory Organizations (SROs) of the microfinance sector, viz., Sa-Dhan and
Microfinance Industry Network (MFIN) collect data on complaints against microfinance companies.
As informed by MFIN, in the MFIN-Customer Grievance Redressal Mechanism (CGRM), in the last
1 year (Dec 2024 - Nov 2025), none of the complaints related to charging of higher interest rate was
received. As informed by Sa-Dhan, during the last quarter July-September 2025, only one complaint
was related to higher interest rate; and got resolved within a month.
e) and f) As reported by RBI, numbers of NBFC-MFIs operating in Dungarpur and Banswara districts
of Rajasthan are 13 and 12 respectively. Information on number of complaints received regarding
charging interest above the prescribed limit is not maintained by RBI.
Additionally, as informed by MFIN, in Dungarpur-Banswara districts, during the period Dec 2024 to
Nov 2025, no complaints were received regarding excessive interest charges or coercive recovery
practices.
g) As informed by MFIN, the amount of loan disbursed by the microfinance companies (NBFC-MFIs)
state wise in FY 2023-24 and FY 2024-25 is as below:
Disbursement by NBFC-MFIs (Amount in ₹ Crores)
State FY 2023-24 FY 2024-25
Andaman & Nicobar Islands 8.83 12.67
Andhra Pradesh 1,159.80 1,450.84
Arunachal Pradesh 51.99 88.16
Assam 906.16 2,141.32
Bihar 17,417.84 16,315.44Chandigarh 3.05 3.74
Chattisgarh 2,284.56 2,355.20
Dadra & Nagar Haveli, Daman and Diu 0.31 1.10
Delhi 29.99 20.69
Goa 65.37 59.34
Gujarat 3,207.81 2,914.43
Haryana 1,269.28 1,281.85
Himachal Pradesh 76.33 84.03
Jammu & Kashmir 54.45 54.75
Jharkhand 3,410.00 3,230.81
Karnataka 11,338.36 11,042.11
Kerala 2,198.89 2,042.52
Madhya Pradesh 7,174.24 7,425.83
Maharashtra 7,766.91 8,881.34
Manipur 0.95 0.49
Meghalaya 8.05 26.57
Mizoram 4.69 1.37
Nagaland 2.84 17.99
Orissa 6,688.57 5,535.40
Pondicherry 197.58 197.96
Punjab 1,123.15 1,177.30
Rajasthan 4,633.34 4,203.29
Sikkim 9.00 13.98
Tamil Nadu 12,803.83 12,126.81
Telangana 462.91 1,147.91
Tripura 419.06 469.21
Uttar Pradesh 14,904.33 14,219.81
Uttarakhand 499.31 525.56
West Bengal 6,379.41 7,050.09
Other 1,226.07 29.34
India 1,07,787.29 1,06,149.27
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