A liter of milk costs around ** Indian rupees, whereas one egg costs approximately ***** rupees in India in 2025. ** rupees translates to around ***** dollars a day, the poverty line set by the World Bank (in terms of Purchasing Power Parity), which signifies extreme poverty.

As per the revised poverty thresholds of World Bank in 2025, around **** percent of India's population lives on three U.S. dollars a day. At 4.20 dollars a day, a more representative threshold for lower-middle income economies, almost ** percent of India's population was considered poor.

As of May 2025, there were nearly *** million housing units completed across the north Indian state of Uttar Pradesh within the "housing for all" (HFA) program since 2014. The HFA-program is part of the Pradhan Mantri Awas Yojana - Urban scheme of the Indian government. What is affordable housing? The right to housing is recognized as one of the very basic human rights in the Universal Declaration of Human Rights by the United Nations. The basic aim is to provide shelter for every human. The next step is to establish “adequate housing”. Thereby, a few conditions must be met to differentiate basic shelter from adequate housing. One of these conditions is affordability. From a broader perspective, affordability can be measured by correlating income and housing expenses. From a narrower perspective, the costs for housing must not compromise other basic rights such as the right to food or family well-being. Government schemes on affordability Indian governments since independence have focused on the issue of affordable housing in the context of poverty reduction. In 2015, the government announced a “housing for all” program that aimed at providing a safe home to every Indian by 2022. The existing Indira Awas Yojana was renamed in Pradhan Mantri Awas Yojana in the same year and split into one scheme for the urban and one for the rural population. Furthermore, the introduction of Real Estate Regulation Authorities in 2017 is meant to increase transparency on the market and strengthen the rights of buyers.

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Microfinance Market Size 2025-2029

The microfinance market size is forecast to increase by USD 206.8 billion at a CAGR of 14.1% between 2024 and 2029.

The market is experiencing significant growth, driven by the emergence of social media and increasing digital connectivity. This trend is particularly prominent in the Asia Pacific region, where the market is expanding rapidly. However, the industry faces challenges related to inadequate risk management. The proliferation of digital platforms is enabling financial inclusion, reaching populations previously underserved by traditional financial institutions. In the Asia Pacific region, for instance, over 200 million adults remain unbanked, presenting a vast opportunity for microfinance institutions. Yet, the sector's growth is not without challenges. Effective risk management remains a significant hurdle, as microfinance institutions grapple with assessing and mitigating risk in an environment characterized by limited financial data and high operational complexity. Companies seeking to capitalize on market opportunities and navigate challenges effectively must invest in advanced risk management solutions, leveraging technology and data analytics to mitigate risk and expand their reach. Additionally, strategic partnerships and collaborations can help microfinance institutions overcome operational complexities and expand their offerings, catering to the diverse financial needs of their clientele.

What will be the Size of the Microfinance Market during the forecast period?

Request Free SampleThe market encompasses loan facilities and financial services catering to the low-income segment, primarily focusing on cottage industries and household income generation. Microfinance credit plays a crucial role in poverty reduction by providing access to financial aid for individuals and microenterprises, often bypassing traditional lending practices. Technological infrastructure, including digital platforms and mobile banking, significantly contributes to the market's growth, enabling financial inclusion and economic empowerment. Peer-to-peer lending and technological integration have reduced operating costs, allowing financial institutions to offer microcredit facilities with competitive interest rates. Traditional banking services are increasingly adopting technology to streamline loan processing, savings accounts, money transfers, leasing services, and financial return tracking. The financial health of microfinance institutions relies on effective credit scoring and maintaining financial return, attracting private sector banks and fintech companies to invest in this sector. Overall, the market continues to expand, driven by the need for affordable financial services and the increasing adoption of technology.

How is this Microfinance Industry segmented?

The microfinance industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. End-userSmall enterprisesSolo entrepreneursMicro enterprisesUsageAgricultureManufacturing/ProductionTrade and servicesHouseholdOthersTypeBanksNon-banksService TypeGroup and individual micro-creditInsuranceSavings and checking accountsLeasingMicro-investment fundsGeographyAPACBangladeshChinaIndiaIndonesiaVietnamSouth AmericaArgentinaBrazilChileColombiaNorth AmericaUSEuropeMiddle East and Africa

By End-user Insights

The small enterprises segment is estimated to witness significant growth during the forecast period.The market plays a significant role in catering to the financial needs of small businesses, particularly those without access to traditional financial institutions. Fueled by an increasing entrepreneurial spirit, expanding public awareness of microfinance services, and favorable regulatory environments, this market has experienced substantial growth. Microfinance institutions (MFIs) offer loan facilities to various sectors, including rural agriculture, cottage industries, and micro and small enterprises. Digital integration through mobile banking, point-of-sale systems, and peer-to-peer lending platforms has broadened reach and improved accessibility, especially in remote areas. MFIs provide financial services such as savings accounts, money transfers, leasing services, and loan processing to promote financial health and social mobility among unbanked populations. Despite challenges like high interest rates, short repayment periods, and operational costs, MFIs remain crucial in poverty reduction and financial inclusion.

Get a glance at the market report of share of various segments Request Free Sample

The Small enterprises segment was valued at USD 59.80 billion in 2019 and showed a gradual increase during the forecast period.

Regional Analysis

APAC is estimated to contribute 48%

In 2024, India’s real gross domestic product (GDP) growth rate was around **** percent, the highest in South Asia. In contrast, Nepal reported the lowest real GDP growth rate in the region at approximately **** percent that year, but it was forecasted to increase to **** percent in 2026.Economy in South Asia In general, South Asia encompasses Sri Lanka, Pakistan, Afghanistan, Bangladesh, Nepal, India and Bhutan. In 2020, India had a GDP of over *** trillion U.S. dollars, while Bangladesh and Sri Lanka followed. The Maldives and Bhutan were among the countries with the lowest GDP in the Asia-Pacific region. In South Asia, the main economic activities include the services sector as well as the industrial and manufacturing sectors.Society in South AsiaFrom the South Asian countries, Bangladesh had the highest share of people living below the poverty line. The Maldives and Sri Lanka exhibited the highest and second-highest GDP per capita among the South Asian countries in 2021.

The estimated per capita income across Sikkim was the highest among Indian states at around *** thousand Indian rupees in the financial year 2024. Meanwhile, it was the lowest in the northern state of Bihar at over ** thousand rupees. India’s youngest state, Telangana stood in the fifth place. The country's average per capita income that year was an estimated *** thousand rupees. What is per capita income? Per capita income is a measure of the average income earned per person in a given area in a certain period. It is calculated by dividing the area's total income by its total population. If absolute numbers are noted, India’s per capita income doubled from the financial year 2015 to 2023. Wealth inequality However, as per economists, the increase in the per capita income of a country does not always reflect an increase in the income of the entire population. Wealth distribution in India remains highly skewed. The average income hides the disbursal and inequality in a society. Especially in a society like India where the top one percent owned over ** percent of the total wealth in 2022.

The statistic shows the national debt in India from 2020 to 2023 in relation to gross domestic product (GDP), with projections up until 2030. In 2023, the national debt of India amounted to about 81.23 percent of the gross domestic product. India’s economy on the rise India is one of the most populous countries in the world, and although a large share of inhabitants are living below the poverty line – or probably due to this fact –, the country’s economy is growing steadily. India’s GDP growth is expected to remain steady at more than 7 percent for the next few years, which is almost double that of the global GDP, and both GDP and GDP per capita are expected to increase significantly. Almost half of India’s workforce is employed in the agricultural sector, but services and industry share the other half quite equally. India’s GDP is mostly generated by the services sector, which includes transport, retailing, and offering services in the hospitality and tourism industry. India’s trade balance has been in the red for a decade now, but seems to recover slowly. A trade deficit usually means that a country’s import costs are higher than the amount of money generated with exporting goods. India’s imports could not be compensated for by the country’s exports, as imports have been consistently, even if only slightly, higher over the years both in terms of volume and value. Still, all signs point to India’s economy growing and thriving, reducing India’s debt (as seen above) and unemployment rate, enabling the inhabitants to create a better life for themselves.

In 2025, Luxembourg was the country with the highest gross domestic product per capita in the world. Of the 20 listed countries, 13 are in Europe and five are in Asia, alongside the U.S. and Australia. There are no African or Latin American countries among the top 20. Correlation with high living standards While GDP is a useful indicator for measuring the size or strength of an economy, GDP per capita is much more reflective of living standards. For example, when compared to life expectancy or indices such as the Human Development Index or the World Happiness Report, there is a strong overlap - 14 of the 20 countries on this list are also ranked among the 20 happiest countries in 2024, and all 20 have "very high" HDIs. Misleading metrics? GDP per capita figures, however, can be misleading, and to paint a fuller picture of a country's living standards then one must look at multiple metrics. GDP per capita figures can be skewed by inequalities in wealth distribution, and in countries such as those in the Middle East, a relatively large share of the population lives in poverty while a smaller number live affluent lifestyles.

According to the Global Hunger Index 2024, which was adopted by the International Food Policy Research Institute, Somalia was the most affected by hunger and malnutrition, with an index of 44.1. Yemen and Chad followed behind. The World Hunger Index combines three indicators: undernourishment, child underweight, and child mortality. Sub-Saharan Africa most affected The index is dominated by countries in Sub-Saharan Africa. In the region, more than one fifth of the population is undernourished . In terms of individuals, however, South Asia has the highest number of undernourished people. Globally, there are 735 million people that are considered undernourished or starving. A lack of food is increasing in over 20 countries worldwide. Undernourishment worldwide The term malnutrition includes both undernutrition and overnutrition. Undernutrition occurs when an individual cannot maintain normal bodily functions such as growth, recovering from disease, and both learning and physical work. Some conditions such as diarrhea, malaria, and HIV/AIDS can all have a negative impact on undernutrition. Rural and agricultural communities can be especially susceptible to hunger during certain seasons. The annual hunger gap occurs when a family’s food supply may run out before the next season’s harvest is available and can result in malnutrition. Nevertheless, the prevalence of people worldwide that are undernourished has decreased over the last decades, from 18.7 percent in 1990-92 to 9.2 percent in 2022, but it has slightly increased since the outbreak of COVID-19. According to the Global Hunger Index, the reduction of global hunger has stagnated over the past decade.

The national floor level minimum wage in India in 2024 was *** Indian rupees per day and has remained consistent for the last few years. The National Floor Level Minimum Wage (NFLMW) is the minimum wage below which no state government can fix. Different states set their minimum wages. The NFLMW was brought into effect in 1996 by the Indian central government. Stagnant minimum wages The Labor Ministry revises the NFLMW every two years, below which states should not fix their minimum wage. The ministry last revised it in 2017. As per economists, the non-revision of the NFLMW hurts the wages of workers engaged in bidi production, plantations, and similar sectors that often employ women. Living wage versus minimum wage India plans to replace its minimum wage system with a living wage by 2025 and has sought assistance from the International Labor Organization (ILO) to develop a framework. The ILO defines a living wage as the wage level necessary to afford a decent standard of living, given a country’s circumstances, whereas the minimum wage is the lowest remuneration required by law to be paid by employers to employees for work performed during a given period. The shift aims to elevate millions out of poverty and to ensure the well-being of unorganized workers.

In 2024, the gross domestic product (GDP) of China amounted to around 18.7 trillion U.S. dollars. In comparison to the GDP of the other BRIC countries India, Russia and Brazil, China came first that year and second in the world GDP ranking. The stagnation of China's GDP in U.S. dollar terms in 2022 and 2023 was mainly due to the appreciation of the U.S. dollar. China's real GDP growth was 3.1 percent in 2022 and 5.4 percent in 2023. In 2024, per capita GDP in China reached around 13,300 U.S. dollars. Economic performance in China Gross domestic product (GDP) is a primary economic indicator. It measures the total value of all goods and services produced in an economy over a certain time period. China's economy used to grow quickly in the past, but the growth rate of China’s real GDP gradually slowed down in recent years, and year-on-year GDP growth is forecasted to range at only around four percent in the years after 2024. Since 2010, China has been the world’s second-largest economy, surpassing Japan.China’s emergence in the world’s economy has a lot to do with its status as the ‘world’s factory’. Since 2013, China is the largest export country in the world. Some argue that it is partly due to the undervalued Chinese currency. The Big Mac Index, a simplified and informal way to measure the purchasing power parity between different currencies, indicates that the Chinese currency yuan was roughly undervalued by 38 percent in 2024. GDP development Although the impressive economic development in China has led millions of people out of poverty, China is still not in the league of industrialized countries on the per capita basis. To name one example, the U.S. per capita economic output was more than six times as large as in China in 2024. Meanwhile, the Chinese society faces increased income disparities. The Gini coefficient of China, a widely used indicator of economic inequality, has been larger than 0.45 over the last decade, whereas 0.40 is the warning level for social unrest.

Over 909 million people in India lived in rural areas in 2023, a decrease from 2022. Urban India, although far behind with over 508 million people, had a higher year-on-year growth rate during the measured period.