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MFI woes may come to end as investors return to regulatory-hit sector

By Religare
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Over two years after Andhra Pradesh government came down heavily on microfinance institutions (MFIs), investors are beginning to return to the rattled sector. Despite the controversial regulations governing the sector, ten investors, domestic as well as foreign, have invested around Rs 869 crore in FY13.

Multilateral lender IFC, and Caspian investors invested the highest USD 53 million equity in Chennai-based Equita. IFC also invested in Suryoday and Ujjivan during the year. The investors include financial institutions and private equity players, among others, a media report said.

 

These MFIs like SKS Microfinance have lost most of their pricing power as they can charge just 23-27 per cent interest rate now as compared to 40 per cent charged earlier before 2010.

Read more about: microfinance
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