Arohan Financial Services on Friday announced the implementation of a risk-based pricing framework powered by its credit scoring model. Effective immediately, interest rates across its microfinance products will range between 19.99% and 24.24%, depending on borrowers’ credit risk profiles and the repayment behaviour.
Under the new framework, customers with stronger creditworthiness will benefit from interest rates that are among the lowest in the NBFC-MFI sector. Those with stronger credit discipline and lower risk characteristics will benefit from competitive pricing.
Earlier, the company had put in place a self-imposed margin cap of 12% over its effective yield, demonstrating its focus on borrower protection and charging appropriate rates.
Manoj Nambiar, managing director, said: “Risk-based pricing allows us to reward good repayment behaviour, improve portfolio quality, and ensure long-term sustainability while staying true to our mission of financial inclusion.”
The company remains committed to clear communication and borrower protection while expanding access to affordable credit, he said.