MFIs ready to halve Andhra Pradesh loan rates

MUMBAI: Cash-strapped micro-lenders in Andhra Pradesh are toying with the idea of recasting distressed loans by almost halving interest to 15%, with a view to improve abysmal repayment rates in the country's largest microfinance market.

The repayment rate in the state is as low as below 5 per cent, according to many MFI players. It was alleged earlier that micro-financiers were charging exorbitant interest rates of over 30% before the Andhra government clamped down on the business last October

Meanwhile, Mumbai PSU lender Corporation Bank has not seen any rise in loan delinquencies despite rising interest rates, a top bank official has said.