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Micro loan interest rates down on lower cost of funds

Due to successive rate cuts by the RBI

Image via Shutterstock
Image via Shutterstock

With cost of funds for microfinance institutions coming down significantly due to successive rate cuts by the RBI, interest rates on small loans have come down by more than 100 basis points in the last one year. Moreover, in the next quarter there could be a further reduction in interest rates. According to Manoj Kumar Nambiar, managing director of Arohan in the next quarter alone there was a possibility of further reduction in interest rate by 100 basis points, as not only have the cost of funds come down, but its credit rating has also improved. At present, Arohan on an average, ...