SKS Microfinance has announced a 1.55% cut in the interest rate charged on borrowers from 23.55% to 22% with effect from July 1. This is the second rate cut by the NBFC since October 2014.
After the present cut, the company will have lowest rate among NBFC-MFIs on its core income generating loans which are unsecured micro loans. “The announcement is consistent with the company’s policy of passing on advantages accruing from reduction in the cost of borrowing, economies of scale and operational efficiency to its borrowers,” the company said in a statement. “Company’s sustained turnaround, improved profitability in FY15, capital raise in May 2014, rating upgrade and issuance of commercial papers and non-convertible debentures are the factors that drove the reduction,” the statement said.
The company said that during the most difficult Andhra Pradesh crisis, it did not join corporate debt restructuring (CDR) and met its financial obligations amounting to R5,800 crore to the banking system without any hair-cut.