The four MFIs have pan-India operations across 20 states and provide microfinance 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 MFIs will be moving up the grading scale,” Microfinance Institutions Network (MFIN) chief executive officer, Alok Prasad, stated in a release
MFIN is an association for the microfinance industry and its membership consists of 42 non-banking financial company MFIs 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.