Ananya Birla's Svatantra Microfin secures India's largest investment deal from Advent International and Mu
Advent International and Multiples to invest INR 1,930 Crores or $230M in Ananya Birlas Svatantra Microfin, marking the largest private equity investment in India's microfinance sector. Svatantra recently acquired Chaitanya India Fin Credit Limited. The transaction is subject to regulatory approvals from the Reserve Bank of India and Competition Commission of India. Key Points
Economic TimesAvoid taking loans from microfinance institutions: Assam CM
Assam Chief Minister Himanta Biswa Sarma urged women in the state to avoid taking loans from microfinance institutions due to high interest rates. Assam, which saw a spate of loan defaults and stress in rural households, had signed an agreement with microfinance institutions in 2021 for implementation of a relief scheme. Key Points
The Economic TimesMicrofin lenders mull dedicated special-purpose funding body
Microfinance lenders in India are considering setting up a dedicated funding institution to provide a consistent stream of long-term financing that will help close the sector's funding gap. Several small and medium microfinance lenders find it difficult to mobilise funds, and banks are less likely to provide financing in contrast to larger NBFC-MFIs. A special-purpose funding body dedicated to the sector would help address that, according to sector leaders. Key Points
Economic TimesHousehold income limit for micro loans should be raised to ₹5 lakh, demand NBFCs: Report
The last time criteria relating to the annual household income limit for giving micro loans to individual borrowers was revised was in 2022, when it was upped from ₹1.25 lakh in rural areas and ₹2 lakh in urban and semi-urban areas to a uniform ₹3 lakh. Key Points
mintNBFC-MFIs largest provider of microfinance: Report
According to the report, the MFI sector has immense growth potential with the market size estimated by MFIN to be around Rs 13 lakh crore during the current fiscal 2023-24. MFIN said that the new regulations have guided the strengthening of governance in microfinance operations. Key Points
Economic Times
MFI loans rise 25.2% in Oct-Dec
Currently, there are 83 microfinance institutions with a loan amount outstanding of Rs 1.2 trillion, accounting for 38.5% of the total industry portfolio. Key Points
FinancialexpressMore pain for microfinance sector, sticky loans jump to all time high of Rs 42,300 cr
Despite a sizeable sheet cleansing by large microfinance institutions (NBFC-MFIs) and small finance banks in the third quarter of this fiscal year through write-offs, the amount of sectoral non-performing assets jumped to about Rs 42,300 crore as of end-December — an about 16% increase from three months earlier. This is the highest ever NPA for the sector. Key Points
Economic Timesmicrofinance Institutions empowering women entrepreneurs amidst social challenges
MFIs in India have disbursed loans to millions of women, helping them start and expand their businesses..RBI guidelines define microfinance loans as collateral-free loans given to households with an annual income of up to ₹3 lakh. Key Points
mintChanging weather patterns and easy microfinance loans push women farmers in Maharastra into debt cycle
Microfinance, defined by the Reserve Bank of India as collateral-free loans given to low-income households earning up to ₹3,00,000 annually, was meant to create “microentrepreneurs”, according to the World Bank, by helping them access credit for their businesses to grow. In Vidarbha, the epicentre of India’s agrarian crisis with thousands of farmers dying by suicide over the last two decades, changing weather patterns and easy access to microfinance loans are creating a new crisis: pushing women farmers into an unending spiral of debt and despair. Figures with the microfinance Institutions Network (MFIN), an industry association, show that the number of microfinance loans in Maharashtra rose from 82.89 lakh on March 31, 2021 to 91.66 lakh on March 31, 2022. While thousands of mostly male farmers in the region have been reported to commit suicide annually, local activists suspect that unsustainable debts might even be pushing some women over the edge. But government data is unlikely to reflect this as farmer deaths by suicide are not segregated by gender, says the Maharashtra government’s Revenue and Forest department in response to an RTI plea. The crisis is not restricted to Maharashtra. The agrarian State of Punjab has also reported its women being burdened with unending cycles of microfinance loans. As of September 30, 2020, the number of women borrowers in Punjab stood at 12.88 lakh with an outstanding principal amount of ₹4,387 crore, according to a statement from MFIN. In Tamil Nadu, a survey by the All India Democratic Women’s Association in December 2021 revealed women were increasingly turning to microfinance loans and enduring abuse and ill-treatment at the hands of loan agents when unable to repay. Key Points
The HinduIndividuals, businesses are increasingly defaulting on microloans. Both lenders & borrowers at fault
Data from microfinance industry bodies shows microloan delinquency ratios are rising once again, after having fallen consistently 2021 onwards. Lenders must do deeper checks, say experts. Key Points
ThePrint
Nifty may touch 23,000 over next 1 year; largecaps to dominate: Dipan Mehta
“Across the board, I do not think there is any sector which is highly overvalued per se. But in two to three sectors, especially the external facing ones, like chemical and software, an investor needs to be a bit cautious. I would like to remain underweight in these two industries.” Key Points
Economic TimesSidbi's India microfinance Equity Fund doesn't find many takers
Several NBFC-MFIs found the clauses attached for taking the funding support from Sidbi quite stringent. They believe the clauses may create roadblocks in raising fresh equity from new investors. One of the clauses says that NBFC-MFIs cannot take fresh equity capital at terms more favorable than those offered to Sidbi, unless such terms are approved by it. Key Points
Economic Timesmicrofinance loan portfolio jumps to nearly Rs 3.5 lakh cr at March-end; portfolio quality improves: Report
Credit and finance for MSMEs: 7.17 crore loans involving Rs 2.96 lakh crore were disbursed during FY23 as against 6.30 crore loans amounting to Rs 2.39 lakh crore disbursed in FY22, indicating higher ticket size of new loans. Key Points
FinancialexpressFinancing the growth in Bharat: 4 small finance banks with upside scope of up to 38%
It might surprise many of you, ask your driver, your help at home, or the small chai shop owner how much interest he pays when he or she takes an unsecured loan taken in the private loan market. He or she might be paying four to five times more than the interest rate which any regular bank charges on an unsecured loan. That is what led to the birth of microfinance companies, now many of them are small finance banks. They are providing lending at the lowest end of the pyramid. Their interest rates were higher than normal banks would charge, but would surely much lower than what private money lenders in these parts of the country charges. That is where the opportunities are present for these small finance banks. After a phase of tough regulatory challenges, they have emerged stronger. Key Points
Economic TimesMFI loan collections improve in October-December qtr
Portfolio at risk for 30 days past due bucket improved to 3.8% as on December 31 from 9.2% a year ago. Key Points
Financialexpress