Page 2 - Microfinance Institutions

MFI stress not a big concern at a system level, says Swaminathan J

The apex bank has asked lenders to strengthen their underwriting standards and collection efforts to limit the conversion of stress into Non-Performing Assets (NPAs)

MFIN to further tighten norms for micro-loans from January 2025

Reduces MFIs per borrower to three from four

After RBI strictures, MFIs tighten norms to make lending more responsible

After repeated strictures from the Reserve Bank on the industry's practices, the Microfinance Institutions Network (MFIN) on Monday announced a slew of changes to make lending to the bottom of the pyramid more "responsible". From January 1, the self-regulatory organisation's members will ensure that a single MFI client's borrowings are limited to three MFIs as against four at present and the total indebtedness of a borrower including MFI and unsecured retail loans is capped at Rs 2 lakh, a statement said. The body's chief executive and director Alok Misra hoped that the sector will become "more resilient" with the new measures. Over the last few months, the RBI has gone public with its concerns on a slew of practices adopted by the MFIs, including usurious high interest rates, multiple lendings to single borrowers and even practices like not crediting loan repayments to the rightful accounts despite being paid by borrowers. On October 21, the RBI also asked four entities including

Microfinance lending jumps 10% to Rs 40,840 crore in Uttar Pradesh

Microfinance institutions lent Rs 7,584 crore in the previous quarter (July-September 2024) in the state

BFSI Summit: Industry experts discuss future growth paths for NBFCs, MFIs

Business Standard BFSI Insight Summit 2024: Industry experts share insights into reach, regulatory pressures, growth opportunities for non-banking financial companies, microfinance institutions

Microfinance institutions must refrain from reckless lending: DFS secretary

Microfinance institutions (MFIs) have played a crucial role in fostering financial inclusion but they should refrain from any reckless lending, Financial Services Secretary M Nagaraju said on Wednesday. "We should all be careful on this. Any reckless or poor underwriting norms regarding lending to Self Help Groups (SHGs) or Joint Liability Groups (JLGs) will only harm the sector," he said at an event organised by Sa-Dhan here. Anything that will impact their capacity to repay back will actually harm MFIs, he said. "So, we should be very careful in what we lend, when we lend and how we lend because their financial literacy is limitedtheir exposure to the outside world is limited. We should not capitalize on that. We should actually try to empower them, provide the needed finance and also ensure hand holding so that they flourish," he said. Nagaraju said under the SHG-Bank Linkage Programme, there are more than 77 lakh groups with Rs 2.6 lakh crore outstanding loans benefitting about

RBI action on 4 NBFCs: Microfinance SRO makes a pitch for 4% cap on RoA

Issues advisory for reviewing pricing policy

CreditAccess Grameen share price hit 52-wk low on weak Q2 disbursements

The fall in CreditAccess Grameen share price came after the company's disbursements dropped 19% annually to Rs 4,004 cr in Q2FY25, from Rs 4,966 crore in Q2FY24.

Why have microfinance stocks hit 52-week lows today? Check details here

The microfinance industry is currently facing a significant rise in delinquencies, primarily driven by increasing borrower indebtedness, apart from other factors.

Microfinance growth driven more by lenders' loan disbursement than demand

Borrowers are being chased by different kinds of lenders -- universal banks, small finance banks, NBFCs, MFIs and fintechs

Credit costs of MFIs likely to go up to 3-3.5% in FY25: CRISIL Ratings

The asset quality of the microfinance portfolio deteriorated in Q1 FY25 as the heatwave across the country adversely impacted the income of borrowers and collections

Commercial banks turn cautious on lending to smaller microfinance players

Lenders wary after recent RBI guidelines on higher risk weighting for unsecured loans

RBI asks banks to rework biz plan, flags gap in credit, deposit rates

Warns microfinance institutions, NBFCs against 'usurious' rates on small loans

MFIs' worries overstated, but it pays to be cautious: Manoj Nambiar

Manoj Nambiar spoke about how the industry is changing and why credit rating is customers' responsibility

Microfinance institutions' profitability to rise to 2.7-3% this fiscal

Lower credit cost on the back of better collections and asset quality, as well as higher pricing of new loans will help standalone microfinance institutions this fiscal to report higher profitability, which is likely to improve to 2.7-3 per cent, says a report. Microfinance Institutions (MFIs) have recouped from the pandemic and have clawed back market share leadership from banks. They closed FY23 with a 40 per cent market share, 600 basis points higher than the previous year while banks saw their share declining to 34 per cent from 40 per cent in FY22. Icra Ratings, in a report on Monday, said MFIs are likely to report a growth of 24-26 per cent in loan sales this fiscal and 23-25 per cent in FY25 when they are also likely to see a further spurt in profitability to 3.2-3.5 per cent. MFIs profitability stood at 2.1 per cent in FY23. Profitability of these institutions is likely to improve to 2.7-3 per cent in FY24 and 3.2-3.5 per cent in FY25. This is expected on the back of an ...

India's microfinance sector will continue to thrive, get bigger

It is important to appreciate the virtues displayed by stakeholders towards the vision of empowering low-income households

Fusion Micro, Spandana: Rally in MFI stocks has more legs, say analysts

Analysts expect the sector to see strong loan growth in FY24 and FY25 driven by increase in ticket sizes, strong customer acquisitions, and regulatory tailwinds

Microfinance and the success of Mudra

Microfinance institutions have provided credit to people at the bottom of the pyramid, with no collateral

MFIs' net profit more than doubles in Q3 on buoyant interest income

The interest income expanded by 25% YoY to Rs 2,414 crore and sequentially, it rose 9.7% from Rs 2,201 crore in Q2FY23

Manappuram Finance plans to rope in private equity player for MFI unit

Manappuram holds about 98 per cent stake in Micro finance subsidiary