A credit information company stated that delinquency rates on rural loans have deteriorated in the two years to June 2021, with the microfinance books showing the maximum stress.

The concerns on higher Non Performing Assets (NPAs) emanated even as the overall MFI (Microfinance Industry) loans segment experienced a de-growth by 9 per cent to Rs 1.12 lakh crore at the end of FY21.

The report said that rural areas, saw an rise in the average unemployment rate to 7.3 per cent in 2021 from 6.8 per cent in 2019.

While Inflation also surged to 5.9 per cent in the rural areas in FY21 from 4.3 per cent in the year-ago period, the report said.

Delinquency by value deteriorated by 0.5 per cent for rural retail credit, the report said.

(With inputs from PTI)