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IL&FS crisis: Microfinance sector likely to take a hit on cash crunch

It is the smaller players in MFI space that may face more headwinds in resource raising

Ilfs Crisis  |  Ilfs

Namrata Acharya & Abhijit Lele  |  Kolkata/Mumbai 

Growth in the microfinance sector might get constrained due to lack of capital, as banks have stared becoming selective in lending and non-banking finance companies (NBFCs) face liquidity squeeze following the IL&FS crisis. While bigger Micro Finance Institutions (MFIs) depend upon banks and money market to raise funds, mid and smaller MFIs depend on non-banking finance companies.

The series of defaults by Infrastructure Leasing and Financial Services (IL&FS) and its lending arm on financial instruments almost freezed the financing of NBFCs. It has brought the issue of liquidity ...

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First Published: Tue, October 09 2018. 05:39 IST