Two new MFIs raise hopes for Indian sector amid repayment trouble
KOLKATA: Microfinance companies may be in the hot seat after demonetisation-led non-repayment of loans and Uttar Pradesh government’s farm loan waiver announcement, but there are people who are still keen to put money in a market where borrowers in general take joint liability to repay loans.
Two former Axis Bank executives have in fact set up Janakalyan Consultancy and Services, which received NBFC-MFI licence from the Reserve Bank of India as recently as the second week of March, infusing fresh optimism in the sector.
SK Mitra, former Axis Bank president for retail distribution, and Alok Biswas, former cluster head who left the bank in 2010 to set up Jagaran Microfin, have joined hands to set up Janakalyan. Biswas left Jagaran last year.
In another development, agri-commodity financier and equity broker Inditrade Capital, formerly JRG Securities, has announced its venture into microfinance business through a wholly-owned subsidiary Inditrade Microfinance. It has begun operations from Solapur in southern Maharashtra with four branches to cater to Solapur and nearby areas.
“There are significant opportunities in the semi urban areas of the industrialized states for a focused micro finance player,” saidSudip Bandyopadhyay, chairman of Inditrade group of companies.
The minimum capital required to launch an NBFC-MFI is Rs 5 crore.