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Crisil awards high grading for 4 MFIs

mfR1 said to be highest grading awarded by Crisil under its 8-point scale designed for evaluating operations of MFIs

Prashanth Reddy Chintala  |  Hyderabad 

As a part of the ongoing process of evaluating financial institutions, rating agency has awarded ‘mfR1’ grading to four institutions - Bandhan Financial Services, Equitas Microfinance, Janalakshmi Financial Services, and Ujjivan Financial Services.  This is stated to be the highest grading awarded by under its eight point scale, especially designed for evaluating the operations of institutions (MFIs).

The four have pan-India operations across 20 states and provide to over eight million clients. With the award of the mfR1 grading to these institutions, the MFI industry is now being seen as relatively low risk and strongly trending towards stability.

“This is a red letter day in the history of the industry. For the first time ever, four significant MFIs, headquartered in different parts of the country have received the highest grading. The positive regulatory stance of the Reserve Bank of India & the Indian government, coupled with intensive efforts made by the industry players themselves towards achieving higher operating and compliance standards has resulted in this happy development. I am hopeful that in the months to come many more of our member will be moving up the grading scale,”  Institutions Network (MFIN) chief executive officer, Alok Prasad, stated in a release

MFIN is an association for the industry and its membership consists of 42 non-banking financial company in the country.

The industry, particularly in Andhra Pradesh, plunged into a crisis after the state government came out with a legislation in 2010, regulating their lending and recovery practices.

First Published: Mon, October 21 2013. 15:09 IST