Y'all are focusing on AI war abroad while ignoring a crisis looming back home.

No It's not inflation or taxes. It is the NPA crisis in micro finance industry(MFI). Recently I saw news about two women who ended their lives in Karnataka blaming micro finance companies. Even the state government has taken the situation seriously. I thought this was a one of/isolated event until it started [reflecting on the balance sheets](https://www.ft.com/content/0665c6d4-9a24-4a5c-8bb5-82b57c1bb9c4). All micro finance lenders are facing higher delinquencies especially in 30-180 days past due category. Banks like IDFC are reducing their micro finance loan disbursal. While the overall NPAs of the banking industry is stable. BUT The NPAs in MFI has grown by 28 % & 50% QoQ for banks like RBL & IDFC Bank respectively. While NBFCs like credit access have increased their provisions by 7 times. In [this article](https://www.ft.com/content/0665c6d4-9a24-4a5c-8bb5-82b57c1bb9c4) you can see even large institutions like HDFC & Axis are also not spared in this crisis. It seems [RBI foresaw this and had cautioned](https://www.reuters.com/markets/asia/india-cenbank-governor-warns-non-bank-lenders-growth-at-any-cost-approach-2024-10-09/) banks & NBFCs against increasing their personal & unsecured loan book. But all the restrictions RBI placed seem to be too little too late. The NPAs are ballooning. So is this the end Not exactly. [The house hold savings is expected to rise significantly in FY24-25](https://economictimes.indiatimes.com/news/economy/indicators/indian-households-saving-more-or-just-drowning-in-debt/articleshow/117296763.cms). The increase in savings is being attributed to decrease in house hold liabilities which reduced to 4.7% of GDP in the first half of FY25 from 6.9% during the same period in FY24. But looking at the situation in H2 of FY25 the numbers might be lower than expected by the end of the year. This also seems to be the primary reason behind dip in GDP numbers despite a moderate rise in consumption. An interest rate cut might just be inevitable now. Both to help the BFSI & increase consumption.