Crisil, a credit rating agency based in Bangalore, India, has downgraded its rating of five Indian microfinance institutions (MFIs), citing low debt collections in Andhra Pradesh.
The credit rating of Bhartiya Samruddhi Finance Limited (BSFL), a regulated non-banking finance company (NBFC) based in Hyderabad, India; Equitas Micro Finance India, an MFI based in Chennai; and Spandana Sphoorty Financial Limited, an MFI based in Hyderabad, were downgraded from “BBB” to “BB+”. Ujjivan Financial Services, an MFI based in Bangalore, and Asmitha Microfin Limited, an MFI based in Hyderbad, were downgraded from “BBB-” to “BB”.
In a statement, Crisil said, “There has been no let up in the challenging operating environment, with the ordinance issued by the Government of Andhra Pradesh being converted into a Bill with no changes. Collection efficiency in Andhra Pradesh continues to be low.”
By Witt Gatchell, Research Associate
About Bhartiya Samruddhi Finance Ltd. (BSFL):
Bhartiya Samruddhi Finance Ltd. (BSFL) is a regulated non-banking finance company (NBFC) based in Hyderabad, India, that was founded in 1997. It is part of the BASIX Group, which provides financial services, agricultural/business development services and institutional development services to rural poor households. According to the Microfinance Information Exchange (MIX), BSFL reported a gross loan portfolio of USD 223.2 million, total assets of 302.6 million and 1.1 million active borrowers as of March 31, 2010.
About Equitas Micro Finance India Private Ltd:
Equitas is a microfinance institution (MFI) that was created in December 2007 and is located in Chennai, India. The company provides microcredit to low-income households in India. The objective of the company is to make credit available at a reasonable cost and in a transparent manner to the underbanked population of India, as well as achieve sufficient returns on investment in order to attract capital. As of March 2010, Equitas reports to the Microfinance Information Exchange (MIX) assets of USD 165 million, a gross loan portfolio of USD 134 million, 888,600 active borrowers, return on assets of 4.5 percent and return on equity of 12.38 percent.
About Spandana Sphoorty Financial Ltd:
Spandana Sphoorty Financial Limited provides microcredit and “credit-plus” services to low-income households in India. The company was founded by Padmaja Reddy in 1998 and receives its funding from development finance institutions and banks. As of year-end 2009 Spandana had a gross loan portfolio of USD 787 million and 3.7 million borrowers.
About Ujjivan:
Ujjivan is a microfinance institution (MFI) based in Bangalore, India, that offers loans and insurance. It was founded in 2004 and focuses on low-income women in urban and semi-urban areas. Its products include business loans, educational loans, emergency loans, and life insurance. As of year-end 2009, Ujjivan had total assets of USD 90.5 million, a gross loan portfolio of USD 82.4 million, a return on equity (ROE) of 9.4 percent and a return on assets (ROA) of 3.2 percent.
About Asmitha Microfin Limited:
Asmitha Microfin Limited is a microfinance institution (MFI) based in Hyderabad, India. It offers collateral-free group and individual loans to women. It was founded in 2002 and operates primarily in rural areas. It is registered as a “Public Limited Company.” In October of 2008, MicroCapital reported the purchase of a minority stake in Asmitha by BlueOrchard Private Equity, the private equity arm of BlueOrchard Microfinance Investment Managers. According to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, the MFI reported a gross loan portfolio of USD 315 million, total assets of USD 389 million and 1.3 million active borrowers as of 2009.
Sources and Additional Resources:
[1] The Hindu Business Line: “Crisil downgrades 5 microfinance institutions”
http://www.thehindubusinessline.com/2011/01/02/stories/2011010251090300….
MICROCAPITAL BRIEF: Local Government in Indian State of Andhra Pradesh Considers Additional Microfinance Regulation, Requires Disclosure of Operational Procedures, December 17, 2010
https://www.microcapital.org/microcapital-brief-local-government-in-india…
MicroCapital Universe Profile: Bhartiya Samruddhi Finance Ltd. (BSFL)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bha…
MicroCapital Universe Profile: Equitas Micro Finance India Private Ltd.
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Equ…
MicroCapital Universe Profile: Spandana Sphoorty Financial Ltd.
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Spa…
MicroCapital Universe Profile: Ujjivan
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Ujj…
MicroCapital Universe Profile: Asmitha Microfin Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asm…
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/tiki-index.php
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