Page 4 - Microfinance Institutions

MFIs welcome RBI's regulatory framework for microfinance loans

Microfinance institutions and an MFI-turned lender hailed the RBI's Regulatory Framework on microfinance loans announced on Monday saying that these guidelines will further deepen the penetration of micro-credit in the country. The Reserve Bank of India (RBI) allowed microfinance lenders to fix interest rates on loans with a rider that those should not be usurious for the borrowers. A microfinance loan is defined as a collateral-free loan given to a household having an annual income of up to Rs 3 lakh. The framework for microfinance loans announced by the RBI will further help deepen penetration of micro-credit in the country, MD & CEO of Bandhan Bank C S Ghosh said. Bandhan Bank is a microfinance company that got a universal banking licence some years ago. The latest guidelines are a strong reflection of the maturity of MFIs in the country and will go a long way in harmonising the regulatory framework for different types of lenders, encouraging healthy competition and enabling ..

Microfinance lenders cannot charge usurious interest rate: RBI

Microfinance lenders cannot charge usurious rate of interest from borrowers, the Reserve Bank said on Monday

RBI lifts interest cap on microfinance institutions, bans usurious rates

Borrower cannot be charged any amount not been explicitly mentioned in a factsheet, says regulator.

Myths and reality of microfinance

The size of loans and tenure of repayment can be increased. MFIs should also be allowed to give secured micro loans, depending on the end use and quantum, if we want to change the poverty landscape

MFIs' qualifying asset threshold has to be lowered, says Alok Misra

'MFIN has been pushing its members to do daily reporting to credit bureaus', said Misra

Sa-Dhan introduces credit assessment framework for microfinance borrowers

Sa-Dhan, a self-regulatory organisation for the microfinance sector, Thursday said it has introduced the credit assessment framework (CAF) for microfinance borrowers. Over the past one-and-a-half years, Sa-Dhan has worked to introduce a conducive and effective framework that will enable income assessment and risk profiling of borrowers, according to a statement. The CAF has been developed based on national and international models of poverty assessment like PPI (Progress out of Poverty Index) and Poverty Assessment framework of National Rural Livelihoods Mission, Government of India. The framework will help to supplement and improve the existing income assessment model of MFIs with verifiable wellbeing indicators, utilise and integrate existing data points of clients available with MFIs and provide a credit worthiness score (CWS), risk profiling for each client. It will also promote risk-based loan pricing and loan sizing and prevent over-indebtedness of vulnerable and low-income .

Rating agency ICRA lowers MFI asset growth estimate to 12-14% for FY22

Next year to be better; but spurt in Covid-19 cases poses risks

Reserve Bank of India likely to tweak norms to reduce MFI risk

RBI may tweak the qualifying assets threshold for microfinance institutions (MFIs) to 75 per cent of their net assets, compared with the current level of 85 per cent of net assets

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MFIs want Rs 3 lakh as loan cut-off to widen scope of eligible borrowers

If the RBI agrees to this suggestion, 50 million MFI customers will join the current net of 60 million and an outstanding portfolio of Rs 2.45 trillion

Sa-Dhan seeks Rs 7,500 cr more for credit guarantee scheme for MFIs

Sa-Dhan has issued a press release basis the letter written to the Finance Minister

SBI signs pact with 3 NBFC-MFIs for co-lending to joint liability groups

The agreement is for co-lending to individual members of JLGs to undertake agriculture and allied activities including other income generation activities

MFIs, Assam govt sign MoU for microfinance incentive and relief scheme

Microfinance Institutions Network on Tuesday said 37 microlenders and Assam government have signed an MoU for joint implementation of the Assam Microfinance Incentive and Relief Scheme (AMFIRS), 2021

Regulations key to orderly growth of microfinance

The RBI's CD defines microfinance clients based on the current household income limit applicable for NBFC-MFIs

MFI consultation paper: Incrementally positive for NBFC-MFIs, says report

The paper has proposed greater harmoni­sation in the overall regulatory landscape

Microfinance loan portfolio grows 11.9% as on March-end, says MFIN

The industry's gross loan portfolio (GLP) surged to Rs 259,377 crore

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RBI proposes to lift interest rate cap on microfinance institutions

Proposes debt-income cap; common rules for all micro-loan lenders

Covid-19 pandemic impact: ICRA downgrades ratings for two MFIs

The rating action factors in the significant increase in delinquencies and the pressure on profitability and growth in light of the Covid-19 pandemic

30-day overdues in microfinance loans may double to reach 14-16%: Crisil

Collection efficiency of MFIs likely to drop to 75-80% in May, from 90-95% in March, creating asset quality pressures