SKS Microfinance informed stock exchanges on Wednesday that MUDRA (Micro Units Development & Refinance Agency Limited ) has sanctioned a refinance line of Rs 100 crore at 10 per cent per annum to the company.
By: FE Online | October 28, 2015 11:06 AM
This is the first refinance limit sanctioned to SKS Microfinance by MUDRA. (Photo: Reuters)
Microfinance lender SKS Microfinance informed stock exchanges on Wednesday that MUDRA (Micro Units Development & Refinance Agency Limited ) has sanctioned a refinance line of Rs 100 crore at 10 per cent per annum to the company.
MUDRA was launched by the government for financing micro entrepreneurs engaged in small business activities like manufacturing, processing, service sector and trade.
This is the first refinance limit sanctioned to SKS Microfinance by MUDRA. The development is expected to help bring down the cost of interest-bearing liabilities at SKS Microfinance. Earlier, with the cost of its interest-bearing liabilities dropping to 11.9 per cent in Q1-FY16 from 13.6 per cent in FY14 on account of downward adjustments in risk premium, the company could reduce the interest rate charged to borrowers on three occasions since October 2014. With an overall reduction of 3.8 per cent since October 2014, SKS Microfinance charges 20.75 per cent on all its disbursements with effect from October 1, 2015.
“This is the first refinance line availed by us,” said S Dilli Raj, president, SKS Microfinance in a release. “At a rate of 10 per cent, this is lower than regular term loans from conventional lenders, and reinforces our assertion in the recent past that the Non Banking Financial Company – Micro Finance Institution (NBFC -MFI) structure does not preclude us from availing dedicated refinance lines at a lower rate of interest. We are already the lowest cost lender in the MFI segment, and will pass on this benefit to our microfinance borrowers at an appropriate juncture.”
SKS Microfinance shares were trading 5.46 per cent up at Rs 422 in morning trade.
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