 "SKS Microfinance rallies on reducing interest rate")
SKS Microfinance has rallied nearly 7% to Rs 452 on the BSE on heavy volumes, after the company announced a 100 basis point (bps) reduction in the interest rate charged to borrowers.
The company today announced a 1% reduction in the interest rate charged to borrowers from 20.75% to 19.75% with effect from December 7, 2015, for all future disbursals. This is the fourth interest rate reduction, aggregating 4.8%, announced by the Company since October 2014.
Meanwhile, the Reserve Bank of India (RBI) has revised upwards the loan amount with tenure for not less than 24 months from the present limit of Rs 15,000 to Rs 30,000 in case of non-banking financial company-micro finance institutions (NBFC-MFIs). All these loans would be prepaid without any penalty.
"This RBI move is positive for the microfinance sector as MFIs will be able to give higher short duration loans. However impact will be limited as customers currently can take higher amount for greater than 24 months and pre-pay without penalty," said Parag Jariwala, VP – Institutional Research, Banking and Financial services, Religare Capital Markets.
The trading volumes on the counter jumped nearly four-fold with a combined 3.63 million shares changed hands on the BSE and NSE till 01:13 PM.
The company today announced a 1% reduction in the interest rate charged to borrowers from 20.75% to 19.75% with effect from December 7, 2015, for all future disbursals. This is the fourth interest rate reduction, aggregating 4.8%, announced by the Company since October 2014.
Meanwhile, the Reserve Bank of India (RBI) has revised upwards the loan amount with tenure for not less than 24 months from the present limit of Rs 15,000 to Rs 30,000 in case of non-banking financial company-micro finance institutions (NBFC-MFIs). All these loans would be prepaid without any penalty.
"This RBI move is positive for the microfinance sector as MFIs will be able to give higher short duration loans. However impact will be limited as customers currently can take higher amount for greater than 24 months and pre-pay without penalty," said Parag Jariwala, VP – Institutional Research, Banking and Financial services, Religare Capital Markets.
The trading volumes on the counter jumped nearly four-fold with a combined 3.63 million shares changed hands on the BSE and NSE till 01:13 PM.
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