Demonetisation: MFIs could witness up to Rs 1,700 cr in losses following the move, says Bandhan Bank CEO
8 years, 4 months ago

Demonetisation: MFIs could witness up to Rs 1,700 cr in losses following the move, says Bandhan Bank CEO

India TV News  

The government’s decision to demonetise high-value currency notes will take its toll on the microfinance industry and could lead to losses in the range of Rs 1,500 crore to Rs 1,700 crore, Chandrashekhar Ghosh, CEO of Bandhan Bank, has said. Meanwhile, rating agency India Ratings and Research on Thursday said microfinance institutions may experience high overdues. The agency's analysis shows that most MFIs have liquidity in the form of "unencumbered cash" and unavailed bank lines to meet debt obligations for 30-60 days in the event of business disruption. "If money flow does not fully normalise by 4Q FY17, Tier 1 capital of few MFIs could come close to regulatory minimum levels," the report said.

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History of this topic

MFI portfolio declines, bad assets spike in Sept qtr: Report
2 months, 2 weeks ago

MFI portfolio declines, bad assets spike in Sept qtr: Report

Live Mint  

Mumbai, Jan 8 Microlending outstandings in the system reduced 4.3 per cent to ₹4.14 lakh crore in the September quarter as lenders adopted a cautious stance amid deteriorating asset quality, a report said on Wednesday. Loans unpaid for 1-30 days increased to 2.1 per cent from the 1.2 per cent in June, while the ones unpaid for 31-180 days witnessed …

Share of stressed MFI assets, borrower indebtedness rises in H1: RBI report
2 months, 3 weeks ago

Share of stressed MFI assets, borrower indebtedness rises in H1: RBI report

Live Mint  

Mumbai: The share of stressed loans has risen in the microfinance portfolios of Indian lenders across ticket sizes, adding to concerns about the sector. In the first half of FY25, impairment among borrowers who had availed loans from multiple lenders and those with higher credit exposure remained high, reflecting the rise in borrower indebtedness, the report said. In the quarter …

Microfinance mayhem: This MFI ​could have ​‘going concern’ issues
3 months ago

Microfinance mayhem: This MFI ​could have ​‘going concern’ issues

Live Mint  

In 2018, Warburg Pincus made its first investment in the microfinance sector in India. The opposite is true for Fusion Finance Ltd. On 15 November 2024, Fusion’s auditor Deloitte Haskins & Sells said in a report that pointed to the “Existence of material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern". Even …

Ghost of microfinance comes back to haunt IndusInd Bank
3 months, 1 week ago

Ghost of microfinance comes back to haunt IndusInd Bank

Live Mint  

IndusInd Bank’s shares hit a new 52-week low of ₹965.55 on Friday. IndusInd’s slippages in microfinance lending jumped almost 18% sequentially in Q2 to ₹398 crore. Sure, slippages in vehicle financing, too, rose 5% sequentially in Q2 to ₹692 crore, but the slippage in MFL is more alarming considering that the book size at the beginning of the quarter was …

Microfinance stress not alarming, says RBI deputy governor Swaminathan
3 months, 2 weeks ago

Microfinance stress not alarming, says RBI deputy governor Swaminathan

Live Mint  

The Reserve Bank of India believes that the stress in microfinance loans is not alarming, deputy governor Swaminathan J said on Friday, even as data showed rising repayment delays by borrowers. At the end of June, 2.5 million microfinance borrowers had loans from five or more lenders each, up 17.2% from the same period last year, showed data from credit …

Microfinance self-regulator expects stress to stabilize by January
4 months ago

Microfinance self-regulator expects stress to stabilize by January

Live Mint  

Mumbai: Microfinance Institutions Network, the self-regulatory organization for the sector, expects the current bad loan stress that microlenders face to stabilize by January next year with new rules in place. The sector’s self-regulatory organization made key changes including reducing the number of lenders to a borrower to 3 from 4 earlier, and capping the maximum indebtedness of a borrower at …

Microlenders wake up to hangover after credit party
4 months ago

Microlenders wake up to hangover after credit party

Live Mint  

Mumbai/Bengaluru: Microlenders that splashed out money to indebted individuals are now struggling to get it back, raising concerns that payment delays could show up on balance sheets soon. Leading microfinance companies including CreditAccess Grameen, Fusion Finance and Equitas Small Finance Bank have warned that many of their customers may be over-leveraged, after discovering that some have four or more active …

Microfinance meltdown: Five stocks that could come out on top
4 months, 1 week ago

Microfinance meltdown: Five stocks that could come out on top

Live Mint  

The microfinance sector is facing a severe downturn, with every small finance bank and non-banking finance company involved in microlending seeing declines of 30-50%. Equitas Small Finance Bank estimates that around 50% of loans overdue by 90 days eventually become NPAs, though this figure varies across lenders. Equitas Small Finance Bank, Ujjivan Small Finance Bank, CreditAccess Grameen Ltd, and Arman …

Microfinance risk: Small loans can spell big trouble for Indian banks
4 months, 1 week ago

Microfinance risk: Small loans can spell big trouble for Indian banks

Live Mint  

Once bitten twice shy" goes the old adage. Driven perhaps by the lack of credit demand from corporates, a boom in retail credit, an eagerness to bridge the last- mile gap in credit delivery and pressure to achieve priority-sector lending targets, banks seem to have lowered their guard and gone overboard in extending such loans. To its credit, the Reserve …

Microfinance sector heading for a bumpy ride as bad loans mount
6 months, 3 weeks ago

Microfinance sector heading for a bumpy ride as bad loans mount

New Indian Express  

MUMBAI: The microfinance sector is headed for a bumpy ride with overleveraged borrowers missing installments, forcing the lenders to go slow on new loan sales in the first quarter of the current fiscal. In the June quarter, MFIs saw their collections falling, leading to higher delinquencies as well as a slowdown in the growth of assets under management, which is …

MFI Risks Rise with Overleveraging in Bihar, UP
6 months, 3 weeks ago

MFI Risks Rise with Overleveraging in Bihar, UP

Deccan Chronicle  

Chennai: Increasing borrower leverage, especially in states like Bihar and Uttar Pradesh, is a key concern for the micro-finance segment. For MFI borrowers, the check on household leverage becomes paramount, as improved availability of loans from MFI players, government loans, Kisan Credit Card loans, mudra loans, gold loans, and other fintech loans could overleverage the end MFI borrower, impacting repayment …

Microfinance lenders go for secured loans to diversify risk
2 years, 3 months ago

Microfinance lenders go for secured loans to diversify risk

Live Mint  

A clutch of microfinanciers is venturing into secured asset classes such as mortgages and gold loans to diversify their portfolio and balance the risk of unsecured microlending with loans that require collateral. The strategy change took shape after a Reserve Bank of India circular in March allowed microfinance institutions to lend 25% of their total assets in non-microfinance loans. Mid-caps, …

Up to 10% credit losses for MFIs in COVID years
2 years, 4 months ago

Up to 10% credit losses for MFIs in COVID years

Deccan Chronicle  

Mumbai: Small loan specialists that cater to people without bank accounts suffered credit losses of up to 10 per cent during the two years of the Covid pandemic, but recovered with stressed asset levels halving with the economy opening up. At a virtual press meet of the Microfinance Institut-ions Network, its CEO and director Alok Misra said the cumulative credit …

MFIs should balance social goals with growth: RBI Deputy Governor M Rajeshwar Rao
3 years, 4 months ago

MFIs should balance social goals with growth: RBI Deputy Governor M Rajeshwar Rao

Deccan Chronicle  

Mumbai: Reserve Bank of India deputy governor M. Rajeshwar Rao on Wednesday said lenders in the microfinance sector while chasing higher loan growth and returns, should refrain from adverse actions such as over-indebtedness, harsh recovery practices and harassment of customers, which would undo the tremendous progress achieved by the sector in financial inclusion over the decades. “The roots and origin …

MFIs may get to set interest rates
3 years, 9 months ago

MFIs may get to set interest rates

Hindustan Times  

Microfinance institutions may get freedom to set interest rates guided by a board-approved policy, under a Reserve Bank of India proposal to review the regulatory framework governing them. The proposal, if implemented, will end the existing regulatory cap on MFI interest rates. However, while doing so, they should ensure usurious interest rates are not charged,” The RBI said in its …

Central bank to review rules as Assam eyes curbs on MFI ops
4 years, 1 month ago

Central bank to review rules as Assam eyes curbs on MFI ops

Live Mint  

The Reserve Bank of India’s decision to look at a uniform regulatory framework for all microfinance lenders, though being discussed for more than five years now, has been brought into focus by an Assam government bill to regulate microlenders in the state, experts said. Uniformity in rules has been sought since Bandhan Financial Services turned into a bank in 2015 …

Microfinance institutions ask RBI for exemption from overdraft restrictions
4 years, 6 months ago

Microfinance institutions ask RBI for exemption from overdraft restrictions

Deccan Chronicle  

Chennai: Microfinance institutions have requested the Reserve Bank of India to exempt them from restrictions on current account and overdraft facility extended by banks as the new guidelines would create operational difficulties for them. The RBI had restricted banks from opening current accounts for customers who have availed cash credit or overdraft facilities. Though loan disbursements of MFIs are through …

Bankers welcome economic package announced by govt, say will encourage lending to MSMEs
4 years, 10 months ago

Bankers welcome economic package announced by govt, say will encourage lending to MSMEs

Firstpost  

The various initiatives announced by the government on Wednesday to support micro, small and medium enterprises will encourage banks to lend more to the sector, bankers said Mumbai: The various initiatives announced by the government on Wednesday to support micro, small and medium enterprises will encourage banks to lend more to the sector, bankers said. “The measures for MSME through …

Finance Minister Nirmala Sitharaman postpones meet with PSB chiefs to later this week
4 years, 10 months ago

Finance Minister Nirmala Sitharaman postpones meet with PSB chiefs to later this week

Firstpost  

Public sector banks have sanctioned loans worth Rs 42,000 crore to the MSME sector and corporates since the start of the lockdown. New Delhi: Finance Minister Nirmala Sitharaman review meeting with CEOs of public sector banks scheduled for Monday afternoon has been postponed. @FinMinIndia — Nirmala Sitharaman Office May 9, 2020 Sitharaman also said state-owned banks have sanctioned loans worth …

Only dozen-odd of 52 microlenders can gain from RBI's special liquidity window, says MFIN chief
4 years, 11 months ago

Only dozen-odd of 52 microlenders can gain from RBI's special liquidity window, says MFIN chief

Firstpost  

Only a dozen-odd of the 52 micro lenders have investment-grade ratings and are thus eligible to issue debt instruments that can be picked by banks using the Rs 50,000-crore special liquidity tap that the Reserve Bank of India has opened up over the weekend Mumbai: Only a dozen-odd of the 52 microlenders have investment-grade ratings and are thus eligible to …

Microfinance industry seeks extension of loan moratorium
4 years, 11 months ago

Microfinance industry seeks extension of loan moratorium

The Hindu  

Microfinance industry association Sa-dhan has written to Prime Minister Narendra Modi seeking extension of loan moratorium benefits to the microfinance industry. “Despite Reserve Bank of India’s circular pertaining to moratorium on retail loans, financial institutions are refraining from extending the same benefits to microfinance institutions,” P. Satish, executive director – Sa-Dhan said. Sa-Dhan pointed out that not extending the moratorium …

Public sector banks have enough cash: Sitharaman
5 years, 5 months ago

Public sector banks have enough cash: Sitharaman

Live Mint  

Public-sector banks have sufficient liquidity and efforts are being made to ensure that due payments are released to micro, small and medium enterprises sector by large corporates ahead of Diwali, finance minister Nirmala Sitharaman said. After a review meeting with heads of public-sector banks on Monday, Sitharaman told reporters that banks have been asked to provide bill discounting facility to …

RBI increases lending limit of MFIs to ₹1.25 lakh
5 years, 5 months ago

RBI increases lending limit of MFIs to ₹1.25 lakh

The Hindu  

The Reserve Bank of India has raised the lending cap for microfinance institutions to ₹1.25 lakh, against the earlier limit of ₹1 lakh, to improve credit availability in rural and semi-urban areas. It has also been decided to “increase the household income limit for borrowers of non-banking financial companies-micro finance institutions from the current level of ₹1 lakh for rural …

Finance ministry asks public sector banks to address MSME sector challenges
5 years, 8 months ago

Finance ministry asks public sector banks to address MSME sector challenges

Live Mint  

The finance ministry has asked state-owned banks to address micro small and medium enterprises sector’s challenges, particularly pertaining to availability of credit. “It is therefore, requested that a CGM/GM level officer may be specifically designated to do an in-depth analysis of the progress made and issues in availability of credit, still being faced by the MSMEs,” the finance ministry said …

MFIs stay resilient to liquidity crisis
5 years, 9 months ago

MFIs stay resilient to liquidity crisis

Deccan Chronicle  

Chennai: The liquidity crisis in the non-banking finance company sector does not seem to have affected the microfinance institutions in this space. The segment has clocked over 40 per cent growth in gross loan portfolio in FY19. Data collated by industry body MFIN India shows the aggregated gross loan portfolio of 53 large and medium NBFC-MFIs, as on March 31, …

Microfinance industry posts 38% growth in 2018-19; total number of accounts stands at 9.33 crore
5 years, 9 months ago

Microfinance industry posts 38% growth in 2018-19; total number of accounts stands at 9.33 crore

Firstpost  

The total number of microfinance accounts was 9.33 crore at the end of March 2019, showing a growth of 21.9 percent, said Microfinance Institutions Network New Delhi: The microfinance industry’s gross loan portfolio stood at Rs 1,87,386 crore at the end of March, up 38 percent year-on-year, said an MFIN report Monday. The total number of microfinance accounts was 9.33 …

Microfinance industry posts 43% growth in loan portfolio to Rs 1.66 lakh cr in December quarter: Report – Firstpost
6 years, 1 month ago

Microfinance industry posts 43% growth in loan portfolio to Rs 1.66 lakh cr in December quarter: Report – Firstpost

Firstpost  

Microfinance industry posted 43.1 percent growth in December quarter 2018 as compared to the year-ago period, with a total loan portfolio of Rs 1,66,284 crore, a report by MFIN said on Monday New Delhi: Microfinance industry posted 43.1 percent growth in December quarter 2018 as compared to the year-ago period, with a total loan portfolio of Rs 1,66,284 crore, a …

Microfinance industry clocks over 50% growth in Q2 with GLP standing at Rs 1,46,741 crore
6 years, 3 months ago

Microfinance industry clocks over 50% growth in Q2 with GLP standing at Rs 1,46,741 crore

India TV News  

Microfinance industry recorded a growth of 51 per cent year-on-year in the second quarter of 2018-19 with total Gross Loan Portfolio standing at Rs 1,46,741 crore, said a report Monday. While the total number of active microfinance accounts for the overall industry was at 7.77 crore with a growth of 27 per cent, NBFC-MFIs witnessed a growth of 32.9 per …

Microfinance institutions' loan portfolio up 47% in FY18 to Rs 68,789 cr: Report
6 years, 6 months ago

Microfinance institutions' loan portfolio up 47% in FY18 to Rs 68,789 cr: Report

Firstpost  

Releasing the Bharat Microfinance Report 2018 on Wednesday, Union MSME Minister Giriraj Singh said the interest rate at which bankers provide loan to microfinance institutions should be brought down so that more people can be brought under the ambit of microfinance. New Delhi: India’s microfinance industry clocked 47 percent growth with a gross loan portfolio of Rs 68,789 crore in …

Demonetisation’s blow to microfinance sector
7 years, 5 months ago

Demonetisation’s blow to microfinance sector

Live Mint  

How has the demonetisation of November 2016 affected the cash-driven microfinance sector? add_main_imageThe Microfinance Institutions Network is an association of non-banking financial company microfinance institutions that publishes a quarterly report called “Micrometer”—a rich source of data on several performance indicators of the country’s microfinance sector. These trends suggest that the MFIs registered a decline in the number of clients, total …

Gross loan portfolio for MFIs rises 8% to Rs35,045 crore in June quarter: report
7 years, 7 months ago

Gross loan portfolio for MFIs rises 8% to Rs35,045 crore in June quarter: report

Live Mint  

Mumbai: The gross loan portfolio of micro loans at the end of the June quarter stood at Rs1.06 trillion, according to a Microfinance Institutions Network report released on Tuesday. Of this, banks, micro finance institutions and small finance banks hold 36%, 31% and 27% share, respectively. MFIN, a self-regulatory body that keeps track of close to 65 institutions registered with …

India’s microfinance industry showing signs of overheating, again
8 years, 1 month ago

India’s microfinance industry showing signs of overheating, again

Live Mint  

Mumbai: India’s microfinance industry is showing signs of overheating in a possible reminder of the crisis that hit micro lenders in Andhra Pradesh in 2010. According to Crif High Mark Credit Information Services, a credit bureau, around 1.26 million microfinance borrowers had received top-up loans over and above their existing loan amounts as of December end. Also, 17% of these …

‘Demonetisation has hit micro loans repayment’
8 years, 2 months ago

‘Demonetisation has hit micro loans repayment’

The Hindu  

: Demonetisation of high-value currency notes has hit repayments of micro loans, many of which originated in Uttar Pradesh and Madhya Pradesh and were adversely impacted following political intervention by local leaders and rumours of loan waivers, Rating Agency ICRA has said. “While collection in micro loan sector is almost entirely in cash, collections in case of MSME loans of …

Micro lending badly hit; surge in use of cards
8 years, 4 months ago

Micro lending badly hit; surge in use of cards

The Hindu  

The country’s micro finance institutions, which essentially extend small loans to the poor and weaker section of society and accepts repayments in cash, is one of the worst hit by the demonetisation move. “The overall transaction count has increased by more than 65 per cent, showing significant shift from cash to card,” said Rajeev Agrawal, chief executive officer, Innoviti Payment …

Microfinance industry is on the cusp of great change: Alok Prasad
9 years, 9 months ago

Microfinance industry is on the cusp of great change: Alok Prasad

The Hindu  

Indian microfinance industry, which plunged into a crisis five years back, had made a turnaround in 2014-15. Microfinance Institutions Network CEO, Alok Prasad, says in an e-mail interview to The Hindu that the industry is at the cusp of great change. The extremely rapid growth of the industry has to be seen in the broader context of the robust core …

Microfinance institutions showing signs of maturity
10 years, 9 months ago

Microfinance institutions showing signs of maturity

Live Mint  

Alok Prasad, chief executive officer of the Micro Finance Institutions Network, a lobby group for India’s ₹ 30,000 crore microfinance industry, is a happy man. RBI’s decision to give MFin SRO status is the culmination of a process that started in 1998 when the National Bank of Agriculture and Rural Development set up a task force for framing regulations for …

SKS Microfinance hopes to come out of red by 2012-13
11 years, 3 months ago

SKS Microfinance hopes to come out of red by 2012-13

The Hindu  

SKS Microfinance has problems of recovery now in parts of West Bengal and Gujarat after slipping into crisis in Andhra Pradesh in October last year due to high interest rates on its lending and its alleged coercive practices in loan recovery. Managing Director and Chief Executive Officer M. R. Rao said at a press conference here on Wednesday that the …

MFIs to grow 30-35% for 3-years: ICRA
11 years, 5 months ago

MFIs to grow 30-35% for 3-years: ICRA

India TV News  

Mumbai: Improved fund availability and significant unrealised potential are likely to help the country's micro finance institutions to grow at an annual rate of 30-35 per cent over the next three years, a study said. "We expect MFIs to grow at an annualised pace of 30-35 per cent over the next three years from Rs 220 billion as on March …

Cure the disease, don’t kill patients
11 years, 7 months ago

Cure the disease, don’t kill patients

Live Mint  

Whether it is the current crisis at the National Spot Exchange Ltd or the Saradha scandal a few months ago, violations of consumer rights, and the resolution of such transgressions continue to befuddle us. One example of such an extreme measure in the name of customer protection is the ordinance on microfinance passed by the Andhra Pradesh government in October …

Capping growth
12 years, 9 months ago

Capping growth

The Hindu  

The regulatory intervention by the RBI has not gone beyond providing a basic legal framework for the functioning of MFIs. The deregulation of micro-credit lending rates by banks has also ensured that they lend to MFIs at high interest rates of 15 to 17 per cent. As MFIs are allowed a margin cap of 12 per cent and an interest …

Responsible lending key to microfinance
13 years ago

Responsible lending key to microfinance

Live Mint  

Mumbai: Microfinance institutions are still struggling for recovery after a crisis triggered by an Andhra Pradesh law in October 2010 that reined in MFIs, which lend small sums of money to poor borrowers; the state is India’s biggest market for such loans. Chakrabarty; director of the Centre for Advanced Financial Research and Learning Usha Thorat; Basix group chairman Vijay Mahajan; …

‘Opaque MFI contracts can lead to sort of sub-prime crisis’
14 years, 1 month ago

‘Opaque MFI contracts can lead to sort of sub-prime crisis’

The Hindu  

Stressing on transparency more than capping of interest rates, the pre-budget Economic Survey today asked the government to take steps to ensure borrowers understand the contract when he borrows from micro finance institutions. We have seen these kinds of phenomena even in advanced economies like the U.S. where the sub-prime home borrowers took on loans without understanding the terms they …

Management is the issue, not slowdown
15 years, 8 months ago

Management is the issue, not slowdown

Live Mint  

Mumbai: Asia’s microfinance institutions have not been affected by the economic slowdown as much as their peers in other continents but continue to face challenges in management, a recent survey said. “The domestic sources of funds in India is also strong.” Microfinance institutions in the US, Latin America and most of Europe face credit and liquidity risk as well as …

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