Noting the resilience in the financial position of three microfinance institutions (MFIs), rating agency ICRA upgraded their ratings.
The three MFIs are Grameen Financial Services Private GFSPL), Ujjivan Financial Services (Ujjivan) and Utkarsh Microfinance Private (Utkarsh).
According to the agency, the upgrade reflects likely improvement in the resilience of their earnings, superior ability to scale up as well as strengthened capacity to control asset quality.
The upgrade is also a result of the clarity and changes in the regulations, the internal changes at the individual MFIs; and ability of the MFIs to regain the confidence of equity investors as reflected in the equity infusions post the AP crisis.
While clarity in regulatory environment, reduction in risk due to regulatory restrictions on overall leveraging of the borrower as well as data sharing through credit information bureaus augurs well for the asset quality of the MFIs.
These MFIs are in a better position to scale up operations in a profitable manner because of the successful reorientation of products and processes by and improved access to external equity, the agency said.
Leave a Reply
You must be logged in to post a comment.