Utkarsh Micro Finance lowers lending rate to 24%

Kolkata: Varanasi headquartered Utkarsh Micro Finance has reduced lending rate for micro loans by one percentage point to 24 per cent.

"The reduction in rate of interest is as per the mission to pass on the benefits of economies of scale and lower operating cost to the clients," Utkarsh managing director and chief executive Govind Singh said.

Utkarsh, which has applied for a small finance bank license, said its margin was 8.98 per cent as on March 31, 2015. As per Reserve Bank of India guidelines, NBFC-MFIs are allowed to have maximum margin of 10 per cent.

Last month, Arohan Financial Services reduced lending rate by 55 basis points to 25.70 per cent a year. Arohan, a part of the Intellecap Group, reduced the rate in step with reduction its cost of borrowing, a company official had said.

SKS Microfinance too lowered its interest by 155 basis points to 22 per cent with effect from July 1, 2015. A 100 basis point is one percentage point.