SKS Micro cuts rates to 24 pc across states

After much hue and cry over high interest rates levied to its customers,leading micro-lender SKS Microfinance finally agreed to reduce its interest rates.

After much hue and cry over high interest rates levied to its customers,leading micro-lender SKS Microfinance today finally agreed to reduce its interest rates across all states to 24 per cent from as high as 26 per cent in Andhra Pradesh and more than 34-40 per cent in other states,according to a top official of the company.

We have already reached with a solution that we are going to reduce our interest rates to 24 per cent in all states across the country in due course of time. Last month,the company had taken a step in reducing the interest rates to the current level of 24.55 per cent from over 26 per cent in Andhra Pradesh. It was done after the state government promulgated an Ordinance to control the MFIs on October 15. Simultaneously,we will take some further steps to reduce it to effectively 24 per cent in our state as well, SKS Microfinance CFO Dilli Raj told The Indian Express.

When asked about any particular time-frame,Raj said,It will happen in due course of time as we are in talks with the state government,Reserve Bank of India and the Ministry of Finance to rectify aspects of the state governments recent ordinance. I hope,we will arrive with a possible solution very soon. MFIs usually lend money to borrowers,especially through womens groups in remote areas. They charge rates as high as 34-40 per cent,mostly due to administrative costs associated in remote areas. However,another SKS official said,Andhra Pradesh currently accounts for 27 per cent of the companys total portfolio, but could not immediately quantify the potential impact of the Ordinance.

In October,the company had reduced interest rates in AP to the current level of 24.55 per cent,from over 26 per cent,after the state government on October 15 promulgated an Ordinance to control the MFIs. But company sources said profitability might be impacted as certain provisions of the ordinance required it to change its operation model. The proposed change in operating model,disruption in customer connectivity at the field level,the resultant reduction in collection in Andhra Pradesh and interest reduction are likely to have a material impact on the companys revenues,profitability and asset quality of Andhra Pradesh portfolio, Raj said.

Day after Diwali, Delhi’s air quality remains ‘very poor’

Cities22 min ago

Delhi's air quality worsens after Diwali, with an average AQI of 346 at 5:30 am. Despite the ban on green crackers, 36 out of 38 monitoring stations showed "very poor" to "severe" pollution levels, with four stations recording severe air quality. Dwarka was the most affected area.

View all shorts

Live Blog

PHOTOS