The last fiscal (FY16) has been a watershed year for the microfinance industry. In the last one year, it has undergone a paradigm shift. With Bandhan becoming a full-fledged bank and few other MFIs opting for small bank licence, it witnessed some new institutions and consolidation of business amongst others.
The sector is beginning to see benefits of scale. For instance, the top-10 MFIs contributing 80% of the sector’s gross loan portfolio (GLP) or over R40,000 crore, have a weighted average interest rate of 23.13%, far below the 26% cap under PSL guidelines. The report highlights that over 36 MFI members have reduced rates significantly in the last fiscal itself.
For more on this story visit the following link: Microfinance sector reaches inflection point on urban surge