The CEOs of Indian microfinance institutions (MFIs) SKS Microfinance, BASIX, Spandana, Share Microfin and Asmitha Microfin have agreed to reduce interest rates charged to borrowers to 24 percent on an annual basis. The announcement came after a meeting with financial services secretary, Mr R Gopalan.
In September MicroCapital reported that the finance ministry asked state-owned banks to ensure MFIs to which they lend on a wholesale basis cap retail lending rates at 24 percent. The new interest rates are set to be implemented immediately in the Indian state of Andhra Pradesh, where MFIs have been accused of overly aggressive collection practices.
By Witt Gatchell, Research Associate
About SKS Microfinance: SKS Microfinance is a microfinance institution (MFI), launched in 1998, that delivers microfinance products through a group-lending model to impoverished women in India. It is a for-profit non-banking finance company, which converted to a public limited company in May 2009 and launched an initial public offering on July 28, 2010. Equity investors include Quantum Hedge Fund, Sequoia Capital, Vinod Khosla, Small Industries Development Bank of India, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus. As of March 31, 2010, SKS Microfinance Private Limited reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 897 million, a gross loan portfolio of USD 653 million, a return on assets of 4.96 percent, a return on equity of 21.56 percent and 5.79 million active borrowers.
About BASIX: BASIX Group consists of several companies based in India that work in 15 states in the country AS OF WHEN and have also extended technical services to other countries in Asia and Africa. Companies in the group provide various services to the poor including financial services, agricultural/business development services, and institutional development services. Its holding company is Bhartiya Samruddhi Investments and Consulting Services (BASICS Ltd.). As of year-end 2009 BASIX had a gross loan portfolio of USD 223 million, total assets of USD 302 million, and 1.1 million active borrowers.
About Spandana: Spandana Sphoorty Financial Ltd. provides microcredit and credit-plus services to low-income households in India. The Company was founded by Padmaja Reddy in 1998 and receives its funding from development financial institutions and banks. As of year-end 2009 had a gross loan portfolio of USD 787 million and 3.7 million borrowers.
About Share Microfin: SHARE Microfin Limited is a microfinance institution (MFI) based in Hyderabad, India. It began operations in 1989 as a nonprofit. It has been a non-bank financial institution since 2000. It offers loans primarily to women as well as training and consulting. As of March 31, 2010, it has USD 576.9 million in assets, a gross loan portfolio of USD 490 million, 990 branches, 2.3 million active borrowers, a return on assets of 5.5 percent and return on equity of 45.18 percent.
About Asmitha Microfin Limited: Asmitha Microfin Limited is a microfinance institution (MFI) based in Hyderabad, India. It offers collateral-free group and individual loans to women. It was founded in 2002 and operates primarily in rural areas. It is registered as a “Public Limited Company.” In October of 2008, MicroCapital reported the purchase of a minority stake in Asmitha on the part of BlueOrchard Private Equity, the private equity arm of BlueOrchard Microfinance Investment Managers. According to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, the MFI reported a gross loan portfolio of USD 315 million, total assets of 389 million and 1.3 million active borrowers as of 2009.
Sources and Additional Resources:
[1] The Economic Times, “MFIs agrees to reduce interest rates to 24 pc” http://economictimes.indiatimes.com/news/news-by-industry/banking/financ…
MICROCAPITAL BRIEF: India’s Finance Ministry Asks Banks to Ensure That Microfinance Institutions (MFIs) to Which They Lend Cap Lending Rates at 24%:
https://www.microcapital.org/microcapital-brief-india%E2%80%99s-finance-m…
MICROCAPITAL BRIEF: Andhra Pradesh Government Plans Legislation to Restrict Collection Practices of Microfinance Institutions (MFIs) After Rise in Suicides Among Borrowers
https://www.microcapital.org/microcapital-brief-andhra-pradesh-government…
MicroCapital’s Microfinance Universe profile: SKS Microfinance
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS…
MicroCapital’s Microfinance Universe profile: BASIX
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BAS…
MicroCapital’s Microfinance Universe profile: Spandana
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Spa…
MicroCapital’s Microfinance Universe profile: SHARE Microfin Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SHA…
MicroCapital’s Microfinance Universe profile: Asmitha Microfin Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asm…
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/tiki-index.php
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