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MFI sector may be hit over liquidity issues: Bandhan Bank CEO CS Ghosh

Ghosh also suggested that microfinance institutions (MFIs) should be cautious in expansion in the present market scenario

Namrata Acharya 

Chandra Shekhar Ghosh, MD, CEO Bandhan Bank , bandhan bank,  Chandra Shekhar Ghosh
Bandhan Bank CEO CS Ghosh

The growth in the microfinance sector may get hampered in the short term due to the present problems in the non-banking finance space, Managing Director and CEO of C S Ghosh said on Tuesday.

Ghosh also suggested that microfinance institutions (MFIs) should be cautious in expansion in the present market scenario.

“In the present scenario, MFIs need to be cautious in lending. There might be some slowdown in the growth in the near term,” Ghosh told reporters.

Ever since the crisis broke out, growth in the microfinance sector has been constrained due to lack of capital. Banks have stared becoming selective in lending and non-banking finance companies (NBFCs) face liquidity squeeze following the crisis.

While bigger Micro Finance Institutions (MFIs) depend on banks and money market to raise funds, mid and smaller MFIs depend on non-banking finance companies.

First Published: Wed, November 28 2018. 05:30 IST
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