Ministry of Finance holds detailed discussion on profits of Microfinance NBFC’s

On November 27, 2010 – Dainik Jagran, the largest selling newspaper in India (Hindi Language) carried an interesting report that stated that the Ministry of Finance had recently held a discussion on microcredit in which a document detailing the profits earned by the MFIs was placed before the members for deliberation.ministry of finance india

An analysis of the profits reported by 13 major non banking finance companies engaged in micro finance has revealed that the profits these firms accumulated through their earnings from interest on loans had swelled from Rs 677.3 crore in 2007-08 to Rs 3776.93 crore in 2009-10. In other words, their profits had multiplied by 5.5 times over a period of two years.

The profits reported by some of the microfinance NBFC’s as given by Dainik Jagran has been reproduced below.

MFIs                                              Interest Profit (In Crores of Rupees)

Microfinance Company    2007-08                             2009-10

SKS Microfinance                  170.1                                          958.92

Bandhan                                       6.56                                          222.11

BSS                                                 7.03                                          155.38

Share Microfinance         113.08                                          475.27

Grameen FS                             82.65                                          327.35

Spandana Spoorthy           127.45                                         724.09

Ujjivan                                       36.37                                          372.89

(Note: Rs 1 crore=Rs 10 million)

It is not known as to what conclusions the Finance Ministry arrived at on the basis of this information but it very likely that it will have an influence on future microfinance policy decisions that will be announced by the Central Government of India.

Source : Dainik Jagran and Mr Devinder Sharma

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