Shares of SKS Microfinance surged more than 6 per cent on Wednesday after the MUDRA sanctioned a refinance line of Rs 100 crore at 10% per annum to SKS Microfinance Limited.
MUDRA (Micro Units Development & Refinance Agency Limited), launched by the Government of India for financing micro entrepreneurs engaged in small business activities like manufacturing, processing, service sector and trade.
This is the first refinance limit sanctioned to SKS Microfinance Limited by MUDRA. The development is expected to contribute to bringing down the cost of interest-bearing liabilities at SKS Microfinance Limited.
Earlier, with the cost of its interest-bearing liabilities dropping to 11.9% in Q1-FY16 from 13.6% in FY14 on account of downward adjustments in risk premium, the Company could reduce the interest rate charged to borrowers on three occasions since October 2014, the company said.
With an overall reduction of 3.8% since October 2014, SKS Microfinance Limited charges 20.75% on all its disbursements with effect from October 1, 2015.
Shares of the microfinance company was seen trading at Rs 426, higher by Rs 6.41 per cent on BSE at 11.54 am IST. It touched an intra-day high of Rs 428 during the trade.