SKS Microfinance slashes lending rate to 24.55 per cent in AP
27 Oct 2010
Indian microlender SKS Microfinance Ltd today cut its lending rates by more than two percentage points to 24.55 per cent, on a reducing balance basis, from the earlier 26.69 per cent. The new rate is applicable in Andhra Pradesh, a spokesman of the company said.
Agency reports quoted the company spokesman Atul Takle as saying that SKS chairman Vikram Akula had last month said the micro lender was willing to cut rates if the Reserve Bank of India wanted it to.
SKS Microfinance has taken much flak after it sacked its chief executive and managing director, earlier this month, without assigning any reason.
A string of suicides by borrowers in Andhra Pradesh saw the state government introduce new restrictions on the microfinance industry, aimed at capping lending rates and putting an end to coercive recovery tactics.
According to rating agency Crisil, the state's share of outstanding microfinance loans represents around 35 per cent of the sector's total portfolio.
The finance ministry has also been advising public sector banks to keep tabs on rates charged by microfinance institutions.
