Microfinance Institutions

While Provisions bill dips; income flows stay subdued

At an MFIN event in Mumbai, RBI Deputy Governor Swaminathan J. said microfinance lenders must ensure pricing reflects cost and risk, improve borrower assessments

Microfinance institutions (MFIs) need to rebuild credibility and confidence to achieve sustainable growth, a joint study by consultancy firm PwC and Sa-Dan, a self-regulatory organisation (SRO) of the sector, said. Microfinance, which is principally underpinned by trust among the stakeholders, who are the borrowers, field officers and lending institutions, has become more transactional, the study said. Major setbacks like demonetisation and the Covid pandemic have further exacerbated the decline in group culture in microfinance, which has had a widespread impact on repayment discipline and public confidence, the study pointed out. "Rebuilding credibility and confidence remains a major challenge to achieving sustainable growth", the study said, adding that empowering and equipping customers with adequate information is crucial in regaining their trust. According to the study, MFIs have also experienced declining support from external stakeholders, including investors and refinancers

DFS secretary M Nagaraju flags a sharp fall in loan accounts and disbursals, urges MFIs to introspect, consolidate operations, and revive passion for financial inclusion

The management holds an encouraging outlook for the current financial year with favourable monsoon forecasts and strengthening rural sentiment laying the groundwork for sectoral development.

CRISIL says MFI profitability to normalise only by end-FY26 as legacy slippages and state-level disruptions in Karnataka and Tamil Nadu slow down recovery prospects

Stock down 4.4 per cent on BSE; eyes 20 per cent AUM growth in FY26

IAD also flags ₹595 crore of unsubstantiated balances in "other assets", as whistleblower complaint prompts deep dive into IndusInd Bank's microfinance portfolio

The microfinance lender's stock fell as much as 4.55 per cent during the day to ₹160.2 per share, the biggest intraday loss since April 7 this year

Darkest hour is over, MFI stocks soar 15-21% as crisis turns into catalyst

Kotak Institutional Equities said microfinance players are now starting to see a scenario where incremental data on forward flows, collections and SMA book is showing an improvement

Rising delinquencies, over-leverage strain the sector

Sa-dhan has urged the government to set up a dedicated MFI refinance body and increase flexibility in the India Microfinance Equity Fund to address funding challenges in the microfinance sector

The Ordinance has excluded Reserve Bank of India (RBI)-regulated entities (REs) which are in this business

The provisions and write-offs of these MFIs jumped to Rs 2,357 crore in Q3fy25 from Rs 378.1 crore a year ago

NBFCs can assess a customer differently and provide a credit solution that differentiates them from banking (companies)

Assam asks MFIs to identify borrowers to get balance payments

CreditAccess Grameen shares: Spandana Sphoorty share price gained 3.6 per cent intraday today; Equitas Small Finance Bank 2.2 per cent; IndusInd Bank 1.9 per cent; and Ujjivan SFB 1 per cent

The bank has set a reserve price of Rs 52 crore for the assets it is putting up for sale, which would translate into a recovery of 14.64%

Spandana Sphoorty Financial shares hit a multi-year low of Rs 309, down 3% on the BSE in Tuesday's intra-day trade, and inched towards its all-time low of Rs 288.75 touched on June 20, 2022