SKS reduces interest rate on micro loans

Interest rate cut in consistent with company's policy of passing on cost savings to borrowers

Hyderabad-based SKS Microfinance Limited today announced a 1.55% reduction in the interest rate charged to borrowers to 22% from the 23.55% level with effect from next month.

The interest rate cut is in consistent with the company's policy of passing on the cost savings to its borrowers, the micro finance company said in a statement.

With the present reduction, the interest rates charged by SKS Microfinance will be the lowest among the non-banking finance company-micro finance institutions (NBFC-MFIs), according to SKS Micro.

The company could reduce its cost of interest-bearing liabilities on account of downward adjustments in risk premium. This is the second interest rate reduction by the firm since October, 2014.