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

Bandhan Bank reduces microfinance loan rate

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Bandhan Bank on Monday reduced its lending rate for micro loans by 0.6 per cent, bringing down the interest to 19.9 from 20.5 per cent.

This is the third time the bank has reduced its interest rate for such consumers. Immediately after the microfinance institution transformed itself into a bank last August, it had slashed the rate by 1.4 percentage points or 140 basis points (bps), effectively reducing the rate to 21 per cent. In April this year, the rate was reduced by another 0.5 per cent or 50 bps for micro-small-scale sectors, making it 20.5 per cent.

With the latest round of lending rate reduction, Bandhan Bank has pared is micro loan rate by 2.5 percentage points or 250 bps in three stages in less than 11 months since it started operations as a universal bank.

Chandra Shekhar Ghosh, the bank’s chairman and managing director, said: “With the transformation of the micro-lending institution into a bank, the cost of funds has come down so we can afford to lower the interest rates. This reduction will benefit the micro-small scale industry who finds it tough to arrange for their funds.”

Since its launch, the bank has mobilised close to Rs 15,000 crore of deposits.

According to Ghosh, this will not only help attract more people opting for loans, but it will ease their financial burden as well. The cost impact on the bank is stated to be favourable with this decision.

Micro loans are generally granted for 1-2 years.

Currently, Bandhan Bank operates across 29 states and Union Territories through a network of 688 branches, 2,022 doorstep service centres and 237 ATMs with more than 8.77 million customers being served by a team of 21,000 employees. The Kolkata-headquartered bank’s savings bank account interest rate is six per cent for balances above Rs 1 lakh and 4.25 per cent for balances up to Rs 1 lakh. For term deposits, the maximum interest rate offered is 8.25 per cent for one to three years, with an additional 0.5 per cent for senior citizens.

Source: http://www.business-standard.com/article/finance/bandhan-bank-reduces-microfinance-loan-rate-116071800513_1.html

Bandhan Bank mops up Rs. 13,000-crore deposits

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Bandhan BankBandhan Bank has been able to rope in nearly seven lakh new customers, after its transformation from a microfinance entity to a universal bank in August last year.

According to Chandra Shekhar Ghosh, Founder, MD and CEO of Bandhan Bank, “Customer addition through the banking network was nearly seven lakh. But, there will be new additions in the micro-banking segment too. Hence, the actual number of new customers will be higher.”

He was speaking on the sidelines of the opening of the bank’s flagship branch here in the city.

This is the bank’s 670th branch. Bandhan’s customer base across micro and general banking stands at over 85 lakh.

With 501 branches, 2,022 door-step service centres and 50 ATMs, Bandhan has been able to mobilise deposits to the tune of Rs. 13,000 crore. Its loan book stands at over Rs. 15,200 crore. According to Ghosh, the bank will soon have branches with dedicated services for high net-worth individuals. The modalities of the services on offer are being discussed, he said.

“Let’s assume we are offering personal wealth management services. Such services will be more on a one-to-one level rather than through bank branches. But, we need to build the scale first for that to happen,” he said.

Extending its service offerings, Bandhan kicked off NRI banking facility. NRI accounts will mostly be for remittances from abroad. The bank also entered the retail lending segment through small ticket home loans and financing of small vehicles in suburbs, semi-urban and rural areas.

Source: http://www.thehindubusinessline.com/todays-paper/tp-money-banking/bandhan-bank-mops-up-rs-13000crore-deposits/article8597526.ece