The domestic rating agency India Ratings (Fitch) maintains a stable rating outlook for FY-26 while revising the sector outlook to deteriorating from neutral. Adequate capitalisation liquidity buffers and profit margins will help absorb the current asset quality downturn. The new directives announced by MFIN to enhance responsible lending practices and reduce delinquencies of MFIs is expected to have a positive impact on asset quality by preventing over-indebtedness, although it might take some months for the impact to be seen.