Nov 012015
 

SKS Couldn’t Get More Lucky: MUDRA Refinance Line

This micro financing scheme has helped thousands of small business owners to expand their business and contribute their share in country’s progress. MUDRA has its success share in processing, manufacturing, and other business activities in trade and service sector.

Recently, a piece of news broke silence of the stock market, and people were glued to their screens when they heard about the news. The shares of SKS Microfinance surged up to 6 %. This was a practical magic because MUDRA sanctioned the refinance line worth RS 100 crore. This is not all. It was done at 10% per annum.

Further details

The SKS Microfinance shares were trading at 6.16% at RS 424.80 rate before this announcement. The high and low were Rs 426.40 and Rs 402.20, respectively, whereas the opening was done at RS 404. But, later the rate went to 6.37% at RS 425.65 at scrip closing.

This is a great news not only for the company but for the other companies as well. It is going to bring more competition and stability in the market. In addition to this, this has happened for the very first time that refinance limit was sanctioned by MUDRA. This entire process is going to bring down the cost bearing liabilities at the company. The president of the company is very glad about this process and deems it to be first refinance line availed by the company. The president further shared his views with the people. He said that 10% rate is extremely beneficial for company’s growth as it is lower than what they get from conventional lenders on normal term loans. This step by the government is further going to prove that the company can get refinance lines at lower interest rates and Non Banking Financial Company – Micro Finance Institution (NBFC -MFI) cannot hinder the progress. The company further seems to provide promising benefits to other companies to facilitate small business owners.

Some of the marketers do not think this step as a game changer. People still think 10% interest rate is not going to affect the business. It should be considered that regular interest rate id 11.9%.

It should be noted that SKS microfinance has started charging 20.75% on its disbursements, which is 3.8 % lower than the last year. If we see the rate last week, there is a slight difference to what the rate is now. The high and low were RS 437 and RS 398 respectively. The total capital of the company is RS 5,180 crore. The promoters of the company hold 6.31% , institutions hold 64.48 % and non institutions hold 29.21 %.  We still need to wait and see what changes MUDRA would bring in the industry.

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