The Self-Help Group Bank Linkage Programme (SHG-BLP) plays a crucial role in providing affordable and timely credit to India’s impoverished and vulnerable populations, who are often excluded from formal credit delivery systems. However, the high incidence of Non-Performing Assets (NPAs) within this sector poses a significant barrier to the continued availability of formal loans, as elevated NPAs disrupt the credit cycle and undermine efforts to alleviate poverty. Historically, the central and northern states of India have recorded NPAs above the national average within the SHG-BLP framework. In this study, we employ multiple linear regression analysis to identify the factors contributing to high NPAs in these regions. Our findings reveal a positive correlation between larger loans and higher NPAs, emphasizing the need for thorough risk assessment and ongoing monitoring when extending substantial credit to SHG members. Additionally, the regression analysis underscores the importance of considering gender dynamics within SHGs. Although women-led SHGs generally perform well, there are inherent credit risks, particularly as both loan size and group size increase. Targeted interventions to support women-led SHGs could enhance repayment rates and reduce NPAs, given that the majority of SHG loans in these regions are managed by female-led groups.