SKS Microfinance, a for-profit microfinance institution (MFI) in India, has announced a universal cut in “effective” interest rates charged to microfinance borrowers from 26.7 percent to 24.6 percent.
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MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Indicates No Interest in Rate Cap, States It Has No Solution For Microfinance Institutions (MFIs) Whose Clients Won’t Repay Their Loans
The Reserve Bank of India (RBI) recently stated that it has no solution for microfinance institutions (MFIs) whose clients refuse to repay their loans amidst the recent turmoil in India’s microfinance industry.
MICROCAPITAL BRIEF: Indian Banks Agree to Reschedule Loans to Microfinance Institutions (MFIs) Contingent on Their Rescheduling Loans to End-borrowers
Indian banks that have disbursed loans to microfinance institutions (MFIs) may have reached an agreement with the MFIs regarding their requests to reschedule their loan payments.
MICROCAPITAL BRIEF: Urged By Local Politicians, Microfinance Borrowers in India’s West Bengal State Stop Repaying Their Loans
Microfinance borrowers in Bolpur, a town in the Indian state of West Bengal, reportedly have stopped paying back their loans to microfinance institutions (MFIs) at the urging of local politicians in the hopes that their debts will be waived.
MICROCAPITAL BRIEF: Indian Government Launches Life Insurance for Self-Help Groups (SHGs)
The Indian government has introduced a life insurance scheme for members of self-help groups (SHGs), village-based groups of about 10 to 20 women that offer savings and loans to their members, in an effort reassure bankers who invest in SHGs.
MICROCAPITAL BRIEF: Daniel Rozas, Vinod Kothari Contrast Microfinance Securities Rating Methodologies Practiced by Rating Agencies CRISIL, Fitch
Daniel Rozas, a microfinance consultant based in Brussels, and Vinod Kothari, a microfinance practitioner based in Kolkata, India, recently wrote an article published on the Microfinance Focus website discussing the different rating methodologies practiced by rating agencies CRISIL and Fitch on securitized microfinance investment products.
MICROCAPITAL BRIEF: Ujjivan Financial Services Raises $8.8m of Debt Capital Through Non-Convertible Debenture (NCD) Issuance to Developing World Market’s Member Company DWM (Cyprus) Limited
Ujjivan Financial Services, a microfinance institution (MFI) headquartered in Bangalore, India, has raised INR 40 crores (USD 8.82 million) of debt capital through the issuance of non-convertible debentures (NCDs) to Developing World Market (DWM) (Cyprus) Limited, a member company of Developing World Markets, a US-based social investment fund manager.
MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) in India Take Legal Action Against Yes Bank for Loan Recall
Several microfinance institutions (MFIs) in India announced that they will be taking legal action against Yes Bank, a private-sector bank headquartered in Mumbai, for recalling loans totaling several billion rupees (the equivalent of tens of millions of US dollars).
MICROCAPITAL BRIEF: Rating Agency Crisil Downgrades Five Indian Microfinance Institutions (MFIs)
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.
MICROCAPITAL BRIEF: Yes Bank of India Recalls Approximately $22m in Loans Advanced to Microfinance Institutions (MFIs)
Yes Bank Limited, a private bank based in Mumbai, India, has reportedly recalled approximately INR 1 billion (USD 22.2 million) in loans it advanced to microfinance institutions (MFIs).
MICROCAPITAL BRIEF: SKS Microfinance Shares Off 9% Amidst Uncertainty Surrounding Indian Microfinance Sector
Shares of SKS Microfinance, India’s only listed microfinance institution, tumbled to an all-time low on Monday, December 20, as uncertainty surrounding the country’s microfinance sector remained high.
MICROCAPITAL BRIEF: Microfinance Experts Say “Microcredit Is Not The Enemy”
The Financial Times, a UK-based newspaper, recently published an opinion piece titled “Microcredit is not the enemy,” which examines the recent microfinance trouble in the Indian state of Andhra Pradesh and some of the misperceptions that have subsequently emerged that deem the industry as “a flawed idea.”
MICROCAPITAL BRIEF: Institute for Financial Management Research Mezzanine Finance Private Limited (IFMR Mezz) Provides $221k in Subordinated Debt to Saija Finance Private Limited
The Institute for Financial Management Research (IFMR) Mezzanine Finance Private Limited (IFMR Mezz), a microfinance investment arm of the nonprofit IFMR, has provided funds worth INR 10 million (approximately USD 221,000) to Saija Finance Private Limited, a non-banking finance company providing microfinance services in northern India, in the form of unsecured, subordinated debt.
MICROCAPITAL BRIEF: Investment Company responsAbility Releases “Microfinance Market Outlook 2011”
responsAbility Social Investments AG, an investment company in Switzerland, recently released “Microfinance Market Outlook 2011,” a report based on surveys of representatives of microfinance institutions (MFIs), investors, rating agencies and consultancies.
MICROCAPITAL BRIEF: SHARE Microfin Limited Officially Delaying Initial Public Offering (IPO) Due to Rising Loan Defaults
SHARE Microfin Limited, a regulated non-banking financial company (NBFC) in India, officially delayed its planned initial public offering (IPO) of INR 10 billion (USD 218 million), originally scheduled for early 2011, due to rising default rates and tightening government regulations in India’s troubled Andhra Pradesh state. A delay had been rumored since October amidst rising uncertainty in the microfinance industry. SHARE Microfin has USD 577 million in assets, a gross loan portfolio of USD 490 million, 990 branches, 2.3 million active borrowers, return on assets (ROA) of 5.5 percent and return on equity (ROE) of 45.18 percent.
MICROCAPITAL BRIEF: Exposure to Microfinance Sector Threatens Banks’ Stocks in India
Recent analyses by Citigroup, a US-based international financial services conglomerate, indicate that banks in India are experiencing stress on their stock prices due to the falling asset quality of their microfinance institution (MFI) holdings, mainly due to the recent trouble in microfinance in the state of Andhra Pradesh.
MICROCAPITAL BRIEF: Finance Minister of India Vows Not to Strangle Indian Microfinance Industry
At a recent event, the Finance minister of India, Pranab Mukherjee, reassured Indian microfinance institutions (MFIs) that the government is not trying to suffocate the industry with new regulation.
MICROCAPITAL BRIEF: Indian State of Karnataka to Start State-run Microfinance Institution
The government of Karnataka, a state in India, recently announced plans to start a state-run microfinance institution (MFI) with an investment of INR 5 billion (approximately USD 110 million), reportedly making it the second state in India to run an MFI, the other being Andhra Pradesh.