SKS Microfinance, the largest microfinance institution in the country, has welcomed the Reserve Bank of India's acceptance of the Malegam committee recommendations.
"The RBI governor's statement accepting the framework of regulations recommended by the Malegam Committee have provided a tremendous boost to the microfinance sector and reaffirm the critical role micro finance plays in financial inclusion," Vikram Akula, chairperson of SKS Micro finance, said.
"We are particularly pleased to see that that the RBI has re-affirmed priority sector status for micro finance and broadened some of the parameters, such as increasing the annual income limits for eligible households to Rs60,000 for rural and Rs1,20,000 for urban and semi urban, increasing the interest cap to 26 per cent and margin cap to 12 per cent, and increasing the total permitted outstanding to Rs50,000. These limits are well suited to SKS's current operating model and will enable us to continue to meet the funding requirements of all our 7.2 million members across the country," S Dilliraj, CFO, added.
He said the RBI statement brings in regulatory clarity and funding certainty.
SKS Microfinance, meanwhile, had announced the sale of securitised loans worth Rs610 crore ($135 million), in order to mop up liquidity amidst a funding shortage that has hit the micro finance industry in Andhra Pradesh.
SKS's securitised loans comprised Rs550 crore ($122 million) sold in two tranches to banks and Rs60 crore ($13.3 million) sold to a non-banking financial company (NBFC). SKS did not reveal the names of the buyers.