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 funding issues, the survey said. But smaller microfinance institutions are facing problems in raising debt and mobilizing capital,” said Mathew Titus, executive director of Sa-dhan, an association of microfinance institutions in India. They will see corporate governance, risk management and technology related stresses.” Political interference, the survey said, takes many forms: directed lending, interest-rate caps, loan forgiveness and subsidized competition.

India Political Interference Microfinance Institutions Microfinance Institutions  interference  slowdown  microfinance  technology  capital  institutions  survey  titus  issue  face  management  sector  lending

History of this topic

India’s Top Banker Must Ease Credit, But Not Too Much
3 weeks, 5 days ago

India’s Top Banker Must Ease Credit, But Not Too Much

Live Mint  

-- Sanjay Malhotra, the new Reserve Bank of India governor, is right to unwind some of his predecessor’s hawkish controls on a runaway consumer-credit boom. Last year, there were 122 million of such small-ticket loans, accounting for 88% of all personal credit origination, according to Blume Ventures, a Mumbai-based early stage venture-capital investor that releases a popular annual report. The …

RBI eases lending rules for small borrowers and NBFCs. Here's what it means
1 month, 1 week ago

RBI eases lending rules for small borrowers and NBFCs. Here's what it means

India Today  

The Reserve Bank of India has eased the stricter loan rules for small borrowers and non-bank lenders at a time when the economy is showing signs of slowing down. The RBI has also put on hold its earlier proposals to increase the capital that banks must set aside for new project loans and the liquidity they need to maintain for …

The plague of souring small loans is back
1 month, 4 weeks ago

The plague of souring small loans is back

Live Mint  

The asset quality pain emerging from the microfinance sector has intensified, with most private sector banks and some state-owned lenders getting singed by a surge in delinquencies. Private sector lender IndusInd Bank’s microfinance business, under Bharat Financial Inclusion, saw slippages of ₹695 crore during the three months through December. “Overall, while incremental stress formation is showing early signs of stability, …

Karnataka cracks down on microfinance firms as rural debt crisis deepens
1 month, 4 weeks ago

Karnataka cracks down on microfinance firms as rural debt crisis deepens

New Indian Express  

The State Government is cracking down on microfinance institutions, using strongarm tactics to recover loans, and drafting a law to check their excesses. The current crisis, to some extent, reflects a larger problem -- the distress in the rural economy -- and this calls for a holistic approach, including the law that is in the works. The system’s failure According …

Share of stressed MFI assets, borrower indebtedness rises in H1: RBI report
3 months 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 stress not alarming, says RBI deputy governor Swaminathan
3 months, 3 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 …

Banking reforms need to get a lot more ambitious for the economy’s sake
3 months, 4 weeks ago

Banking reforms need to get a lot more ambitious for the economy’s sake

Live Mint  

The 19 amendments to banking laws that were passed by the Lok Sabha on Tuesday remove various niggles in extant provisions, straighten out some others and make life easier for bank customers, especially a tweak that allows four nominees per account. While more than 90% of India’s nearly 60 million MSMEs are micro sized and best served by specialized non-bank …

Microlenders wake up to hangover after credit party
4 months, 1 week 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, 2 weeks 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, 2 weeks 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 in doldrums. Will this company outperform, again?
4 months, 3 weeks ago

Microfinance in doldrums. Will this company outperform, again?

Live Mint  

MUMBAI : The true litmus test that differentiates high-quality lenders is whether they have “best-in-class" non-performing asset ratios during crises. View Full Image Source: CreditAccess IP-Q1FY25 For example, after taking a large provisioning hit in Q3FY21, it stated in the next quarter that “strong profitability in Q4 was utilized to absorb the accelerated write-offs and build additional provisioning buffer ahead …

Microfinance sector heading for a bumpy ride as bad loans mount
7 months 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 …

Microfinance emerging as transformative force in North India, says experts
1 year, 7 months ago

Microfinance emerging as transformative force in North India, says experts

Hindustan Times  

Microfinance has emerged as a transformative force in North India, playing a pivotal role in driving economic growth and alleviating poverty, experts said at a ‘Regional Conference on Advancing Financial Inclusion’ organised by Sa-Dhan in Chandigarh on Thursday. In Punjab, where agriculture forms the backbone of the economy, microfinance has empowered smallholder farmers to invest in modern agricultural practices, acquire …

Microfinance lenders go for secured loans to diversify risk
2 years, 4 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, …

IndusInd Bank and the big problem with small loans
3 years, 4 months ago

IndusInd Bank and the big problem with small loans

Live Mint  

Misgivings around risk management are not new for India’s banks. “We believe that the bank’s turnaround story remains intact, but it needs to work more on strengthening credit underwriting/risk management and communication with stakeholders to sustain the long-term re-rating," analysts at Emkay Global Financial Services Ltd wrote in a note. Out of the above, only 26,073 clients were active with …

RBI microfinance proposals that are anti-poor
3 years, 5 months ago

RBI microfinance proposals that are anti-poor

The Hindu  

In June 2021, the Reserve Bank of India published a “ Consultative Document on Regulation of Microfinance ”. The recommendations The consultative document recommends that the current ceiling on rate of interest charged by non-banking finance company-microfinance institutions or regulated private microfinance companies needs to be done away with, as it is biased against one lender among the many. Not …

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 …

India’s micro firms face a credit squeeze
4 years, 6 months ago

India’s micro firms face a credit squeeze

Live Mint  

Amid the farm sector debate, a recent notification by the government of India on the Micro Small and Medium Enterprises went largely unnoticed. Based on the investment criteria, what used to be the upper end in the definition of a medium enterprise—a firm with an investment of ₹100 million —is now defined as a small enterprise. Given the preponderance of …

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 …

Micro lenders looks towards normalcy in Assam as protests against CAB cause delay in loan repayment
5 years, 3 months ago

Micro lenders looks towards normalcy in Assam as protests against CAB cause delay in loan repayment

Firstpost  

Microfinance institutions which have started witnessing delay in loan repayment in Assam following the outbreak of protests against the new citizenship law are keeping their fingers crossed for a stability in their operations, industry insiders said Kolkata: Microfinance institutions which have started witnessing delay in loan repayment in Assam following the outbreak of protests against the new citizenship law are …

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 …

The need for a boost to MSME sector
6 years, 4 months ago

The need for a boost to MSME sector

Live Mint  

Prime Minister Narendra Modi’s Diwali package for micro, small and medium enterprises may be late in the day, but it’s nevertheless a boon, particularly the interest subvention and the measures to see that bills are paid on time. According to the MSME Pulse report, for public sector banks, the level of non-performing assets among MSMEs went up from 13% in …

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 …

Janalakshmi Financial Services raises Rs1,030 crore equity capital
7 years, 6 months ago

Janalakshmi Financial Services raises Rs1,030 crore equity capital

Live Mint  

Mumbai: Janalakshmi Financial Services, India’s largest microfinance company, on Monday said it has raised Rs1,030 crore in equity capital from existing and new investors to fuel growth and begin small finance bank operations. TPG, an investor, led the latest round along with Treeline, a Morgan Stanley Asia-managed private equity fund, QRG Enterprises Ltd and Enam Group’s Vallabh Bhansali. The company …

India’s microfinance industry showing signs of overheating, again
8 years, 2 months 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: 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 …

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 …

Responsible lending key to microfinance
13 years, 1 month 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; …

SKS, microfinance's posterboy, may be teetering on the brink
13 years, 10 months ago

SKS, microfinance's posterboy, may be teetering on the brink

Firstpost  

A JP Morgan report on SKS Microfinance has cut the share price target so sharply that it calls into question the future of the industry. Last Friday, it received another shock when JP Morgan slashed the share price target of SKS Microfinance, the industry’s former poster-boy, from Rs 550 to Rs 200. JP Morgan has slashed the target price on …

Indian state seeks limits on microfinance after reports of abuses
14 years, 4 months ago

Indian state seeks limits on microfinance after reports of abuses

China Daily  

This is the VOA Special English Economics Report. REDDI SUBRAHMANYAM: "The feeling in the community is that many of these deaths have occurred immediately after the recovery agents of the microfinance institutions have either visited the house or have done something insulting." The Asian Development Bank says microfinance institutions in the Asia-Pacific area charge interest of 30 to 70 percent …

Microfinance lenders to stop multiple loans
15 years, 3 months ago

Microfinance lenders to stop multiple loans

Live Mint  

Kolkata: Microfinance firms, institutions that give small loans to poor people, have agreed on a voluntary credit code to ensure that the boom in lending to the unbanked does not lead to loan losses. Listen to Vijay Mahajan, Chairman of the Microfinance India Network, talk about the measures being taken by microfinance lenders Among key decisions taken at a meeting …

Recession may hit microfinance industry’s growth, funding
15 years, 8 months ago

Recession may hit microfinance industry’s growth, funding

Live Mint  

New Delhi: The global microfinance industry may see a fall in growth and funding due to the economic crisis and declining investor confidence, a survey says. “Far from being insulated from the economic mainstream as traditionally thought, microfinance could face a fall in growth and funding because of the global recession and declining investor confidence,” the ‘Microfinance Banana Skins 2009’ …

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