Fusion Microfinance cuts interest rate to 23 pc for existing customers

Fusion Microfinance has reduced the interest rate for its existing customers by 140 basis points to 23 per cent from 24.4 per cent.

New customers will be able to avail loans at 23.5 per cent now instead of previous 24.6 per cent rate. The new rate of interest will be effective from June 1, 2018, the NBFC-MFI said in a statement.

The company had last reduced its rate in November, 2016 by 100 basis points.

"Fusion charges interest rate on reducing balance basis, which means a customer with a one year loan of Rs 12,000 pays around Rs 1,400 as total interest. This is often overlooked as people assume the effective rate to be flat rate of interest," said Devesh Sachdev, Founder and CEO, Fusion Microfinance.

In the fourth quarter of 2017-18, Fusion Microfinance registered around 70 per cent of yearly growth in the gross loan portfolio. Earlier this year, the company closed Series E funding of Rs 80 crore.

Fusion serves over 10 lakh clients through its 375 branches across 14 states. Since inception it has cumulatively disbursed Rs 4,000 crore.