SKS Microfinance gets Rs 100 Cr refinance line from Mudra to support micro entrepreneurs
SKS Microfinance has said Micro Units Development and Refinance Agency (Mudra) has sanctioned a refinance line of Rs 100 crore to the company at 10 per cent per annum to extend finance to micro entrepreneurs. This is the first refinance limit sanctioned to the micro-finance firm by Mudra, a company release said in Mumbai.
"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," SKS Microfinance President Dilli Raj said.
The limit will help the micro-finance company bring down the cost of its interest-bearing liabilities, which stood at 11.9 per cent at the end of first quarter of FY16. The company has seen an overall reduction of 3.8 per cent in cost of its interest-bearing liabilities since October 2014.
"We will pass on this benefit to our microfinance borrowers at an appropriate juncture," Raj said. Mudra was set up by the government for development and refinancing activities relating to micro enterprise units. Its purpose is to provide funding to the non-corporate small business sector which is mostly outside the formal credit system.
Image Credit: Shutterstock
Read More:
SIDBI launches India Microfinance Platform with World Bank Support
Suryoday Microfinance raises an INR 20 crore round led by Aavishkaar Goodwell and Lok Capital