India’s microfinance industry clocked 60% growth in fiscal 2016: Report

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After years of subdued growth, the Indian microfinance (MFI) industry expanded more than 60% to Rs54,329 crore in 2015-16 compared to the previous year, according to a report prepared by Sa-Dhan, the self regulatory organisation of MFIs.

The MFI client base expanded by 2.8 million in the year, taking the total number of clients to 39.9 million, said the report. This growth was despite the fact that Bandhan, which was the largest MFI, moved out of the space to become a full fledged bank.

The top 10 MFIs classified as non-banking financial companies (NBFCs) accounted for about 80% of the total gross loan value, the report said. They include Janalakshmi Financial Services Ltd, Ujjivan Financial Services Ltd and SKS Microfinance Ltd.

“Attaining over 28 lakh clients is no mean feat. This goes on to show that the microfinance industry, having reached its inflection point, is growing steadfastly,” P. Sathish, executive director of Sa-Dhan, said.

The MFI sector experienced a crisis after Andhra Pradesh, the biggest market for small loans made to the unbanked poor and self-employed, in 2010 clamped down on micro lenders.

The state government tightened regulations governing MFIs after reports surfaced that coercive loan recovery practices by the lenders had driven some overextended borrowers to commit suicide. That led to a shrinking of the asset base of the microfinance industry and a surge in bad loans.

Of the total client base of 39.9 million, the southern region alone contributed to 39% of the total client base. Kerala and Karnataka now have the maximum number of MFI branches.

The growth in this sector is also due to Reserve Bank of India allowing many NBFC-MFIs to act as banking correspondents (BCS) connecting commercial banks with customers in small towns and rural areas.

“The MFIs are finding the BC model rather attractive on the credit side,” Sathish added.

The report also claims that 94% of the total loans taken from MFIs are for income generating activities, dominated by agriculture and animal husbandry.

Source: http://www.livemint.com/Industry/4Zb0zp5yOh0toqEdBFz4jL/Indias-microfinance-industry-clocked-60-growth-in-fiscal-2.html

Microfinance lending hits $10 billion

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India’s microfinance industry is close to touching the $10-billion mark with the total loan portfolio of microfinance institutions (MFIs) at an all-time high of Rs. 63,853 crore as of March 31, 2016.

This represents a 31 per cent increase over the Rs. 48,882 crore loan portfolio as of end-March 2015, the Bharat Microfinance Report 2016 showed. The share of NBFC-MFIs stood over 88 per cent, followed by Societies and Trusts at 9 per cent. Nearly 88 per cent of the portfolio is held by MFIs with a portfolio size above Rs. 500 crore. The Bharat Microfinance Report 2016 — published by self-regulatory organisation Sa-Dhan — was released by Reserve Bank of India Executive Director US Paliwal and SIDBI Chairman and Managing Director Kshatrapati Shivaji in the Capital on Wednesday. The sector witnessed a healthy growth in client base with over 28 lakh new members taking the total number of clients to over 399 lakh. But the average loan per borrower of Rs. 11,425 is less than previous year’s Rs. 13,162.

MFI loan portfolio continued to grow at a good clip despite Bandhan, which was then the largest MFI, becoming a bank. If Bandhan’s loan portfolio of Rs. 9,524 crore of 2014-15 is excluded, then the growth rate of the MFI sector between 2014-15 and 2015-16 is over 60 per cent, said P Satish, Executive Director, Sa-Dhan.

“Despite Bandhan going out of the microfinance space, the sector witnessed strong growth. Attaining over 28 lakh clients is no mean feat. This goes to show that the microfinance industry, having reached its inflection point, is growing steadily,” Satish added.

Satish, however, expressed some concern over 13 MFIs recording over 100 per cent growth rates. He also said that MFIs are finding the business correspondent model rather attractive on the credit side.

If Bandhan’s loan portfolio of Rs. 9,524 crore of 2014-15 is excluded, then the growth rate of the MFI sector between 2014-15 and 2015-16 is over 60 per cent: Sa-Dhan ED

 

Source: http://www.thehindubusinessline.com/todays-paper/tp-money-banking/microfinance-lending-hits-10-b/article9108686.ece

FPIs infuses $1 billion in capital markets in September

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Foreign investors have pumped in nearly Rs 6,800 crore (USD 1 billion) into the country’s capital markets so far this month, driven by global and domestic factors.

The latest infusion comes on top of a whopping inflow of Rs 25,904 in the preceding two months (July-August). Prior to that, foreign portfolio investors (FPIs) had pulled out a total of Rs 4,373 crore from the capital markets (equity and debt) in June and July.

Experts attributed the latest flurry in inflow to factors including good and widespread monsoon, better corporate earnings, sound progress on rollout progress of the Goods and Services Tax (GST) and positive data coming from the US economy.

Sentiments also rode high after domestic passenger vehicle sales grew for the 14th straight month in August, they added.

According to depositors’ data, net investment by FPIs stood at Rs 3,178 crore in equities during September 1-9, while the same for debt markets was at Rs 3,617 crore, taking the total inflow to Rs 6,795 crore (USD 1.02 billion).

So far this year, FPIs have invested Rs 44,028 crore in equities while withdrawing Rs 3,730 crore from the debt market. This resulted in a net flow of Rs 40,297 crore.

Source: http://www.financialexpress.com/economy/fpis-infuses-1-billion-in-capital-markets-in-september/373416/

Young entrepreneurs to get more funding from govt

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To support young entrepreneurs, the central government will launch ‘special funds’ for those in the 16-21 years and 21-26 years age groups.

“It’s on the drawing board. We have accumulated funds worth Rs 9,000 crore under the technology cess category, and we want to use this. We might launch incubation centres, innovation hubs and even funds. This country requires investments of Rs 10,000 crore annually if we want to give boost to entrepreneurship,” said Y S Chowdary, ministry of state for science & technology and earth sciences.

He was speaking on the sidelines of the 11th edition of Indian Science and Technology Entrepreneurs Park & Business Incubators Association (Isba) here on Saturday.

The fund will be over and above the Rs 10,000 crore fund-of-funds for start-ups announced by the government early this year.

Over the past two years, the funding to several government departments supporting incubation in India has seen a spurt. H K Mittal, advisor, Department of Science and Technology (DST), said that the support for incubators has gone up 10 times.

“DST’s finance has gone up by at least 4.5x to Rs 180 crore for FY17. Several of our programmes like ‘Power of Idea’, Eureka and Entrepreneur-in-residence have seen their fund corpus going up. Our seed support programme has gone up five times. We can now fund start-ups starting from Rs 50 lakh to Rs 1 crore,” he added.

According to Kshatrapati Shivaji, chairman and managing director of Sidbi, the idea behind creating the fund-of-funds was to give a push to domestic venture capitalists (VCs). “We have already committed Rs 800 crore across 19 VCs, which, in turn, will mobilise the investments.”

The event also saw the signing of the first Indo-US Joint Early Stage Fund with a corpus of $40 million. About 50 per cent contribution for the fund comes from incubators that come under Isba and India Electronics & Semiconductor Association and the rest of the funds will have contribution from high net worth individuals based out of the US and serial entrepreneurs such as Sanjay Sharma, CEO of Roambee Corporation. At present, Isba supports around 100 incubators across India.

NURTURING YOUNG MINDS

  • The Centre to launch ‘special funds’ for those in the 16-21 years and 21-26 years age groups
  • The govt has accumulated funds worth Rs 9,000 crore under the technology cess category, said Y S Chowdary, ministry of state for science & technology and earth sciences
  • Over the past two years, the funding to several government departments supporting incubation in India has seen a spurt
  • Government’s seed support programme has gone up five times. The Centre plans to fund start-ups starting from Rs 50 lakh to Rs 1 crore
  • The 11th edition of Isba (Indian Science and Technology Entrepreneurs Park & Business Incubators Association) also saw signing of first Indo-US Joint Early Stage Fund with a corpus of $40 million

Source: http://www.business-standard.com/article/companies/young-entrepreneurs-to-get-more-funding-from-govt-116091200303_1.html

Indirect tax mop-up rises 27.5% to Rs 3.36 lakh cr till August

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Net indirect tax collections in the April-August period grew 27.5 per cent to Rs 3.36 lakh crore on the back of surge in excise collections.

The collection till August 2016 show that 43.2 per cent of the annual budget target of indirect taxes, which includes Central Excise, Service Tax and Customs, has been achieved.

Till August, Indirect tax net revenue collections are at Rs 3.36 lakh crore, which is 27.5 per cent more than the net collections for the corresponding period last year.

Net tax collections of Central Excise stood at Rs 1.53 lakh crore during April-August, as compared to Rs 1.03 lakh crore during the corresponding period in the previous financial year, registering a growth of 48.8 per cent.Net collections of Service Tax during April-August stood at Rs 92,696 crore, a growth of 23.2 per cent as compared to Rs 75,219 crore during the same period previous year.

Customs mop-up during April-August was at Rs 90,448 crore as compared to Rs 85,557 crore during the same period last fiscal, registering a growth of 5.7 per cent.
The government hopes to collect Rs 8.47 lakh crore from direct taxes and Rs 7.79 lakh crore from indirect taxes, which includes Customs, excise and service tax, in 2016-17.

 

In just 5 months, MUDRA lends over Rs. 42,000 crore & invests Rs 203 crore in securitisation deals

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Micro Units Development & Refinance Agency (MUDRA) has recently closed its fourth deal with a total book of over Rs 203 crore, five months after it stepped into the securitisation market.

It has invested Rs 100 crore in two securitisation deals with Janalakshmi Financial Services and another Rs 50 crore in Satin Credit Care. It has also invested Rs 53 crore in SK Financial Services, a Jaipur-headquartered NBFC through a securitisation deal.

“We are directly investing in pass through certificates either as junior or senior investor,” Jiji Mammen, CEO, MUDRA, said.”All our investments are in healthy loan portfolios that will fetch us good yields.”

The coupon rates for all the securitisation deals are between 9.5 per cent and 10 per cent and the average yield for all assets was around 22 per cent, according to Mammen. Securitisation allows companies to provide part of their loan books and its receivables as guarantee to financial institutions. MUDRA was established as a subsidiary of Small Industries Development Bank of India (Sidbi) by PM Narendra Modi in April this year. The agency was set up with an initial corpus of Rs 5,000 crore to provide capital to all banks seeking refinancing of small business loans under Pradhan Mantri Mudra Yojna.

MUDRA’s latest attempt is to provide support to NBFCs and MFIs so that they in turn finance micro enterprises by participating in securitisation of their loan assets. It provides second loss default guarantee for credit enhancement and participates in investment of Pass through Certificate as senior or junior investor.

In the past five months, MUDRA has disbursed Rs 42,000 crore, one fourth of its total annual target of Rs 1,80,000 crore. The lending agency’s disbursals nearly doubled in the past two months to about Rs 27,000 crore from the Rs 15,000 crore it disbursed in the first quarter of the current fiscal year.

MUDRA has given loans of over Rs 1.3 lakh crore to 35 million borrowers. About 35 per cent of the total loans sanctioned last year were disbursed by MFIs. Among 45 per cent of the total loans disbursed by PSUs, 20 per cent was disbursed by SBI alone while 23 per cent was disbursed by private banks.

Of the planned disbursement of Rs 1.8 lakh crore this fiscal year, public sector banks would disburse Rs 77,700 crore, followed by Rs 21,000 crore by private and foreign banks, Rs 15,000 crore by regional rural banks, and Rs 64,240 crore by MFIs.

Source: http://economictimes.indiatimes.com/articleshow/54286037.cms

Kaya acquires “beneficial interest” in 2 UAE skincare firms

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Skincare firm Kaya Ltd today said it has acquired majority “beneficial interest” in UAE’s Minal Medical Centre and Minal Specialized Clinic Dermatology for an undisclosed sum.

“Kaya Middle East, DMCC, a foreign subsidiary of Kaya Ltd has entered into an agreement dated September 8, 2016 for acquiring 75 per cent beneficial interest in Minal Medical Centre, Dubai and Minal Specialized Clinic Dermatology, Sharjah.

“However, the agreement will become effective on fulfilling of certain conditions precedent and obtaining the requisite statutory approval/s, which will take approximately 4 months,” the company said in a BSE filing.

It further said: “The above said entities carry out business of skincare, body and hair services and reported revenue of Arab Emirate Dirham (AED) 11.17 million (around Rs 20.26 crore), as per the audited financial statements for the year ended December 31, 2015.”

Kaya Ltd said: “This acquisition will further strengthen company’s network of clinics in the UAE region and add new set of customers to our existing base in the region. With its special expertise in body contouring, it would help Kaya in leveraging across the region.”

With this acquisition, the total network of Kaya’s clinics in the Middle East region would increase to 23.

Source: http://www.financialexpress.com/companies/kaya-acquires-beneficial-interest-in-2-uae-skincare-firms/372083/