A series of microfinance-related suicides in India have recently been reported, raising questions about whether the interest rates charged by microfinance institutions (MFIs) are usurious.
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MICROCAPITAL BRIEF: Small Industries Development Bank of India (SIDBI) Sets Up a “Lenders’ Forum” to Promote Responsible Practices Among Indian Microfinance Institutions
Several major lenders to microfinance institutions in India have agreed to set up a “Lenders’ Forum” to promote transparent, responsible and commercially sustainable industry practices and codes of conduct so as to better safeguard the interests of the unbanked who form their client base.
MICROCAPITAL BRIEF: Reserve Bank of India (RBI), in Move to Expand Rural Financial Access, Updates Guidelines to Allow Individuals, Nonprofits and Corporations—But Not Microfinance Institutions—to Serve as Business Correspondents for Banks
The Reserve Bank of India (RBI), India’s central banking authority, recently announced that it has updated guidelines so that “individuals, non-governmental organizations, cooperative societies, post offices and companies with ‘large and widespread retail outlets'” may serve as business correspondents (BCs).
MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Labels IPO of Indian Microfinance Institution SKS “A Critical Transition”
A paper recently published by CGAP (Consultative Group to Assist the Poor) discusses how initial public offerings (IPOs) can shape the microfinance industry.
MICROCAPITAL BRIEF: SKS Microfinance Responds to Probe from Securities and Exchange Board of India on Expulsion of Former CEO Gurumani; Stock Falls Further 6%
SKS Microfinance, a publicly traded microfinance institution (MFI) based in India, confirms that it has received an inquiry from the Securities and Exchange Board of India (SEBI), a government institution whose mandate is to protect the interests of investors, about SKS’s recent expulsion of its former CEO Suresh Gurumani [2].
MICROCAPITAL BRIEF: Bandhan Financial Services of India to Provide Wholesale Loans to Smaller Microfinance Institutions (MFIs)
Bandhan Financial Services, a microfinance institution (MFI) based in Kolkata, India, recently announced that it is considering providing credit to smaller MFIs, in addition to lending directly to low-income groups.
MICROCAPITAL BRIEF: India’s SHARE Microfin in Talks with Asmitha Regarding Merging in Advance of Initial Public Offering (IPO)
An article recently appeared on the Financial Express website claiming that SHARE Microfin, a microfinance institution (MFI) based in Hyberabad, is in talks with Asmitha Microfin, another MFI based in Hyberbad, regarding a possible merger.
MICROCAPITAL BRIEF: Indian Government Creates Swavalamban Pension Scheme for the Unorganized Sector, Asks Microfinance Institutions (MFIs) to encourage participation
The Indian Government has launched a pension scheme for workers in the unorganized sector who do not have access to India’s social security net.
MICROCAPITAL BRIEF: Reserve Bank of India (RBI) May Allow Microfinance Institutions (MFIs) to Acquire Banking Licenses, Accept Deposits
The Reserve Bank of India (RBI) may soon allow microfinance institutions (MFIs) to acquire banking licenses and accept deposits.
MICROCAPITAL BRIEF: CEO of India’s SKS Microfinance Steps Down, Stock Falls 6%
On Monday, October 4, Indian microfinance institution SKS Microfinance announced that its Deputy Chief Executive M.R. Rao would become chief executive and managing director for a three-year, replacing Suresh Gurumani. SKS Microfinance did not provide an explanation for the replacement.
MICROCAPITAL BRIEF: Microfinance Institution (MFI) SHARE Microfin (SHARE) of India Receives Highest Rating from ICRA for Sustainable Management
SHARE Microfin Limited (SHARE), a microfinance institution (MFI) based in Hyderabad, India, has announced that ICRA Limited (formerly known as Investment and Credit Rating Agency of India Limited), a financial rating agency in India that is partially held by Moody’s Investors Service of the US, awarded SHARE with the highest microfinance grade of M1, up from a grade of M2 that was awarded last year.
MICROCAPITAL BRIEF: Indian Microfinance Institution Sanchetna Financial Services Lowers Interest Rate on Samridhi Loan Product from 15% to 12.5% with a 45-Week Term
Sanchetna Financial Services, a Lucknow-based microfinance institution, recently announced that it will lower interest rates on its flagship loan product, Samridhi, from a flat interest rate of 15 percent over 46 weeks to 12.5 percent over 45 weeks.
MICROCAPITAL BRIEF: Avendus Capital of India Invests $8.25m in Securitized Microloans
Avendus Capital, a wealth management company in India, recently announced that it has invested INR 369 million (approximately USD 8.25 million) in securities backed by microfinance loans.
MICROCAPITAL BRIEF: Crisil Assigns SKS Microfinance of India “P1+” Rating for $166m Short-Term Debt Program
On September 24, 2010, Crisil, a credit rating agency based in Bangalore, India, assigned a “P1+” rating to the INR 7.5 billion (approximately USD 166 million) short – term debt program of SKS Microfinance, a publicly owned microfinance institution (MFI) based in India.
MICROCAPITAL BRIEF: India’s Finance Ministry Asks Banks to Ensure That Microfinance Institutions (MFIs) to Which They Lend Cap Lending Rates at 24%
The financial services secretary of India, Mr R Gopalan, has written a letter to public-sector banks asking them to ensure that the microfinance institutions (MFIs) to which they lend on a wholesale basis do not charge more than 24 percent interest to retail borrowers.
MICROCAPITAL BRIEF: Aavishkaar India Micro Venture Capital Fund Reportedly Raising $100m to Set Up Third Private Equity Fund for Microfinance in India
Aavishkaar India Micro Venture Capital Fund (Aavishkaar Venture India), a venture fund that provides equity financing to entrepreneurial initiatives, especially in India at the bottom of the pyramid, is reportedly raising INR 4.58 billion (the equivalent of USD 100 million) to set up its third “microfinance-focused” private equity fund through Aavishkaar Goodwell.
MICROCAPITAL BRIEF: Lokesh Kumar Singh of Sanchetna Financial Services on Corporate Governance in the Indian Microfinance Industry
Lokesh Kumar Singh, Managing Partner at Indian microfinance institution (MFI) Sanchetna Financial Services, recently wrote an article on corporate governance in the Indian microfinance industry that appeared on the India Microfinance Business News website.
MICROCAPITAL BRIEF: More Bankers Joining Indian Microfinance Industry
Anita Bhoir, a columnist of the Indian Express newspaper, recently published an article on the growing number of bankers that are joining microfinance institutions (MFIs) and non-banking finance companies (NBFCs), a broad term that includes some small microfinance cooperatives.