Microfinance Institutions

The interest income expanded by 25% YoY to Rs 2,414 crore and sequentially, it rose 9.7% from Rs 2,201 crore in Q2FY23

Manappuram holds about 98 per cent stake in Micro finance subsidiary

One reason for this shift in trend could be that banks faced challenges in managing this asset class, especially after the outbreak of the Covid-19 pandemic and the resultant lockdowns

The microfinance industry grew over 16-times in the last decade with a loan portfolio of Rs 2.85 lakh crore, a study has said. Going forward customer engagement and protection will lay ground for the long-term sustainable growth. According to the 'Micro Matters: Macro View - India Microfinance Review FY 2021-22' report by Microfinance Institutions Network (MFIN), NBFC-MFIs (microfinance institutions) were the only regulated entity offering micro loans till 2012. The portfolio of the industry grew by 16.5-times from Rs 17,264 crore in March 2012 to Rs 2,85,441 crore as of March 2022. Banks and NBFCs started disbursing micro loans from 2016 while small finance banks (SFBs) joined in 2017. The functioning of MFIN as an SRO (self-regulatory organisation) since 2010 has enabled the sector to build its growth on strong pillars such as customer protection, industry code of conduct and policy advocacy, all of which contribute towards the building a responsible finance ecosystem, Devesh ...

These measures, along with a cap on repayment obligations and steps to check over-indebtedness introduced by the regulator, will eventually bring down interest rates for the borrowers, he says

'Multiple SROs mean a greater number of watchful eyes'

Lenders needed time to make policy changes after norms were updated in March 2022, says industry group

Fund flow to the sector has improved but some smaller MFIs still find it difficult to access finance from banks

Better recoveries, adequate credit enhancements spark investor confidence

MFI will focus on seven states for incremental AUM of Rs 6,000-7,000 crore

The MFI aims to double assets to Rs 15,000 cr by FY25

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The MFI, backed by private equity fund Kedaara Capital, experienced a jolt in November 2021 after Padmaja Reddy, founder and managing director (MD), quit abruptly.

Microfinance institutions and an MFI-turned lender hailed the RBI's Regulatory Framework on microfinance loans announced on Monday saying that these guidelines will further deepen the penetration of micro-credit in the country. The Reserve Bank of India (RBI) allowed microfinance lenders to fix interest rates on loans with a rider that those should not be usurious for the borrowers. A microfinance loan is defined as a collateral-free loan given to a household having an annual income of up to Rs 3 lakh. The framework for microfinance loans announced by the RBI will further help deepen penetration of micro-credit in the country, MD & CEO of Bandhan Bank C S Ghosh said. Bandhan Bank is a microfinance company that got a universal banking licence some years ago. The latest guidelines are a strong reflection of the maturity of MFIs in the country and will go a long way in harmonising the regulatory framework for different types of lenders, encouraging healthy competition and enabling ..

Microfinance lenders cannot charge usurious rate of interest from borrowers, the Reserve Bank said on Monday

Borrower cannot be charged any amount not been explicitly mentioned in a factsheet, says regulator.

The size of loans and tenure of repayment can be increased. MFIs should also be allowed to give secured micro loans, depending on the end use and quantum, if we want to change the poverty landscape

'MFIN has been pushing its members to do daily reporting to credit bureaus', said Misra

Sa-Dhan, a self-regulatory organisation for the microfinance sector, Thursday said it has introduced the credit assessment framework (CAF) for microfinance borrowers. Over the past one-and-a-half years, Sa-Dhan has worked to introduce a conducive and effective framework that will enable income assessment and risk profiling of borrowers, according to a statement. The CAF has been developed based on national and international models of poverty assessment like PPI (Progress out of Poverty Index) and Poverty Assessment framework of National Rural Livelihoods Mission, Government of India. The framework will help to supplement and improve the existing income assessment model of MFIs with verifiable wellbeing indicators, utilise and integrate existing data points of clients available with MFIs and provide a credit worthiness score (CWS), risk profiling for each client. It will also promote risk-based loan pricing and loan sizing and prevent over-indebtedness of vulnerable and low-income .

Next year to be better; but spurt in Covid-19 cases poses risks