MICROCAPITAL BRIEF: Indian Microfinance Institution Sanchetna Financial Services Lowers Interest Rate on Samridhi Loan Product from 15% to 12.5% with a 45-Week Term

Sanchetna Financial Services, a Lucknow-based microfinance institution, recently announced that it will lower interest rates on its flagship loan product, Samridhi, from a flat interest rate of 15 percent over 46 weeks to 12.5 percent over 45 weeks. The effective annualized interest rate will be 27.2 percent [1]. This decision will come into effect for loans disbursed after November 1, 2010.

In July 2010, Sanchetna Financial Services announced receipt of a loan of INR 10 million (USD 211,000) from Maanaveeya Holdings and Investments, the Indian subsidiary of the Dutch cooperative investment fund Oikocredit; a loan of INR 3 million (USD 64,000) from the microfinance investment vehicle (MIV), Ananya Finance for Inclusive Growth; and a loan of INR 2 million (USD 43,000) from the nonprofit trust, Trust MicroFin Network (TMN) [2].

As of March 31, 2010, SFS reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 596,000, a gross loan portfolio of USD 459,000 and 4,233 active borrowers.

By Lindsey Shaughnessy, Research Associate

About Sanchetna Financial Services: Sanchetna Financial Services (SFS), established in India in 2006, is a non-banking financial company that provides microfinance and business development services to India’s poor. As of March 31, 2010, SFS reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 596,000, a gross loan portfolio of USD 459,000 and 4,233 active borrowers.

About Anyana Finance for Inclusive Growth: Anyana Finance for Inclusive Growth is a wholesale lender to 125 microfinance institutions (MFIs) with a portfolio size of INR 4.25 billion (USD 91 million). Anyana is promoted by Friends of Women’s World Banking (FWWB), a microfinance organization in India and network member of Women’s World Banking (WWB).

About Oikocredit: Oikocredit is a Dutch cooperative investment fund comprised of church groups, social support groups and individual investors. Established in 1975, it works in 70 countries worldwide, investing mainly in microfinance institutions (MFIs), as well as trade cooperatives, fair trade organizations and small and medium-sized enterprises (SMEs) in the developing world. As of year-end 2009, Oikocredit reported USD 665 million in total assets with 790 active investments, of which 543 were in MFIs.

About Trust MicroFin Network: Trust MicroFin Network (TMN) is a nonprofit trust promoted by a network of non-governmental organizations (NGOs) that work to alleviate the poverty of women in underdeveloped regions of India. TMN operates in Northern India, specifically in Uttar Pradesh, Bihar, Jharkhand, Uttarakhand and Rajasthan. As of 2005 TMN had received support from Small Industries Development Bank of India (SIDBI), Indian Bank and Sir Dorabji Tata Trust.

Sources and Additional Resources:

[1] India Microfinance Business News, “Sanchetna Financial Services brings down interest rate from 15% to 12.5%”, September 27, 2010. http://indiamicrofinance.com/sanchetna-loan-products-37023.html

[2] MICROCAPITAL BRIEF: “Indian Microfinance Institution (MFI) Sanchetna Financial Services Receives $320,000 from Oikocredit’s Maanaveeya Holdings and Investments, Ananya Finance for Inclusive Growth and Trust MicroFin Network (TMN)”, July 7, 2010. http://www.microcapital.org/microcapital-brief-indian-microfinance-institution-mfi-sanchetna-financial-services-receives-320000-from-oikocredits-maanaveeya-holdings-and-investments-ananya-finance-for-inclusive-growth-and-2/

MicroCapital’s Microfinance Universe profile: Sanchetna Financial Services

MicroCapital’s Microfinance Universe profile: Anyana Financial Services

MicroCapital’s Microfinance Universe profile: Oikocredit

MicroCapital’s Microfinance Universe profile: Trust MicroFin Network (TMN)

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