INSUBCONTINENT EXCLUSIVE:
KOLKATA: Despite hardening of general interest rates, there's some relief for a certain segment of micro loan borrowers by way of lower
A handful of microfinance institutions (MFIs) are reducing lending rates backed by improved efficiency and lower cost of funds.
Fusion
Microfinance, India's ninth-largest MFI by outstanding loans, has cut lending rates by up to 140 points from June
It now offers loans at 23% to existing borrowers compared with 24.4% earlier while the rate for new borrowers is 23.5% against 24.6% earlier
25 basis points in June for the first time in four-and-a-half years, signaling a squeeze in monetary policy to fight inflation
However, several MFIs including Fusion have managed to bring down the cost of funds over the past three to four quarters with an improvement
in credit quality and operational efficiency.
RBI has capped lending rates of NBFC-MFIs at 10% over their cost of funds or 2.75 times the
average base rate of five large banks, whichever is less
So, the lower cost of funds translates into lower lending rates
cheapest micro loan offered by NBFC-MFIs
Delhi-based Satin Creditcare, the second largest NBFC-MFI after Bharat Financial Inclusion Ltd (BFIL), lowered its lending rate by 125 bps
