Microfinance has remained a central pillar of India’s financial inclusion framework, serving low-income and underserved households across rural and semi-urban regions. As of 31 March 2025, the sector covered about 6.8–7.0 crore unique borrowers with nearly 14 crore active loan accounts and a gross loan portfolio of around ₹3.81 lakh crore, reflecting both its scale and continued demand for small-ticket credit. In this context, financial technology (FinTech) has emerged as a transformative force in microfinance delivery. This study investigates the role of FinTech in enhancing microfinance outreach through a comparative analysis of FinTech-enabled lenders and traditional microfinance institutions (MFIs). The study is based on secondary data from RBI, NABARD, Microfinance Institutions Network (MFIN), Sa-Dhan, and industry reports for FY 2024–25, using descriptive and comparative methods. The evidence shows that FinTech has accelerated outreach and improved operational efficiency. Nearly 78% of new microloan onboarding occurs through digital channels compared to 22% in traditional models, with onboarding time reduced from 3–7 days to 15–30 minutes. FinTech lenders account for about 38–40% of new loan accounts and serve a higher share of new-to-credit borrowers (27% versus 7% in traditional MFIs). Processing time is shorter (1–3 days vs. 7–14 days), operating costs are lower (4–6% vs. 8–10%), and staff productivity is higher. At the same time, the study identifies emerging risks, including GNPA levels of 5.8–6.2%, multiple borrowing among 28–30% of clients, and rising digital lending complaints. The findings suggest that while FinTech significantly strengthens outreach and inclusion, sustainable impact depends on balanced regulation, financial literacy, and hybrid models that combine digital scale with borrower protection.