Microfinance News Digest

MFI’s in India seek Rs 800 – 1,000 Crore Loans – News Digest

The News Digest(ND) comprises of news summaries, press releases and important statements related to microfinance, banking, financial services and financial inclusion in India published by various media outlets during the week.

Read previously published News Digests.

MFIs seek Rs 800-1,000 cr loans

Cash-strapped microfinance companies that plan to restructure their debts have requested banks for additional loans of Rs 800-1,000 crore. The micro-lenders also requested banks to consider these loans for restructuring along with their existing debts. BS

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Spandana Microfinance rescue stuck as banks decline to relent

Demand for personal guarantees casts shadow over Hyderabad-based MFI’s debt recast plan. Doubt remains over the Rs 2,300-crore debt recast programme of Spandana Sphoorty Financial, a Hyderabad-based microfinance institution, as banks refuse to relent on their demand for personal guarantees from the promoters. BS

Banks may turn MFI debts into pref shares
Banks plan to convert a part of their loans to microfinance institutions (MFIs) into equities if micro lenders fail to repay these debts even after restructuring, industry sources say. BS

Corporation Bank opens microfinance branch
Mangalore-headquartered public sector lender, Corporation Bank has opened a new micro-finance branch in Hyderabad in its bid to increase financial inclusion initiative of the bank. “The basic objective of opening a micro finance branch is to help the weaker sections of the society especially women through financial inclusion, micro credit and financial literacy,” a bank release said. BS

Rs 25 lakh housing loans come under priority sector lending
The Reserve Bank of India (RBI) today raised housing loan limit to up to Rs 25 lakh against the existing Rs 20 lakh to be eligible for classification as priority sector lending. BS

RBI raises m-wallet limit to Rs 50,000
Relaxing the norms for payments through mobile phones, known as m-wallets, the Reserve Bank of India on Wednesday increased the money-loading limit from the current Rs 5,000 to Rs 50,000. BS

NBFC licences put on hold till review of finance company guidelines
Toyota Kirloskar, and Daimler, the maker of Mercedes cars, will have to wait a few more months to begin their business of lending for car and equipment purchases as the Reserve Bank of India put on hold new licences awaiting new guidelines, said two people familiar with the decision. ET

Cholamandalam to enter gold loan business
Cholamandalam Investment and Finance Company Ltd (CIFCL), part of the Murugappa group, is set to foray into gold loan business, beginning with a pilot in Andhra Pradesh, Tamil Nadu and Kerala, which account for 40 per cent of the gold loan market. BS

Business correspondents explore PE funding route
Business correspondents, which partner banks in their financial inclusion programmes, are planning to raise funds from private equity investors to scale up their operations. BS

Banking facilities for select MP villages by 2012
After a slow progress of the financial inclusion drive last year, bankers have set a target to provide banking access to each village above a population of 2,000 by 2012. The state, according to bank data, has only 2,736 villages out of a total of 52,000, which have a population above 2,000. Bankers in the state have, however, no immediate plans to cover those villages which have a population below 2,000. BS

New housing finance firms face higher capital diktat
To ensure only serious companies enter the sector, the initial capital requirement would be raised from the current Rs 2 crore to Rs 10 crore. This, NHB hopes, would promote better risk absorption capacity and increase the depth of the mortgage finance market in India, said a senior NHB official. BS

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