Equitas aims to cut down microfinance loan share
Bhagyashree Vivarekar / 21 Mar 2017
Equitas Small Finance Bank plans to cut the share of microfinance loans from 49% to 25% by March 2018.
The bank has decelerated the disbursal of fresh microfinance loans and is only providing topping up loans for its existing customers, along with reducing the disbursing microfinance loans to new clients after a one-off event in November.
Equitas Small Finance Bank plans to cut the share of microfinance loans from 49% to 25% by March 2018.
The bank has decelerated the disbursal of fresh microfinance loans and is only providing topping up loans for its existing customers, along with reducing the disbursing microfinance loans to new clients after a one-off event in November ; Where local political leaders in several states misled microfinance borrowers, telling them their loans had been waived off due to demonetization.
Equitas plans to enter into new portfolios such as agricultural loans, gold loans and unsecured business loans going forward.
In 2011, Equitas started housing and used-vehicle loans in a bid to avoid concentration risk arising from a single unsecured lending business. The used- commercial vehicles and housing portfolio stood at 26% and 4% respectively as on 31 December 2016. Medium and small enterprises (including loans against property) stood at 21%.
The microfinance industry saw a fall below 40% in repayment rates post demonetisation in certain parts of Maharashtra, Uttar Pradesh, Madhya Pradesh and Kerala in early December.
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