New Delhi, April 10 -- India's microfinance sector, which went through a tough phase in recent quarters, is now showing early signs of recovery, according to a report by Investec Equities.

The report stated that many companies working in this space are reporting better performance, and asset quality (AQ) is starting to improve. This suggests that the worst might be behind for the sector.

It said, "The current cycle of Indian microfinance appears to be approaching its conclusion, with AQ indicators showing improvement across various MFIs".

The report mentioned that, unlike earlier difficult periods, this slowdown was not caused by any major external event like a natural disaster or government regulation. Instead, it happened due to prob...