SKS Microfinance , India’s largest and most controversial microfinance company today announced that it will be reducing the interest rates it charges on micro loans in the state of Andhra Pradesh.
SKS Microfinance also issued full page advertisements in several local language newspapers in the state of Andhra Pradesh, stating that it had reduced it’s interest rate charged on micro loans from 26.69 %to 24.55 % on a depreciating basis. This is a reduction of 2.14 % and translates into a flat interest rate of 12.55 % p.a.
The rate cuts by SKS Microfinance have been prompted by a furore fueled by the media and political opportunists over the alleged suicides of micro finance borrowers in the state of Andhra Pradesh.
Speaking to the PTI , Mr Dilli Raj, CEO of SKS Microfinance said that “ This is a voluntary action from our side. We were able to reduce the interest rates in Andhra Pradesh considering the scale of operations that we have in the state.” He also further added that the reduction in rates would not have any impact on either the top line or the bottom line of the company.
Mr Dilli Raj also revealed that as per information received from it’s various branches spread across the state the loan recovery has been in the range of 90 per cent so far and could pick up in the coming days.