Rating agency puts MFIs under credit alert
Rating agency Crisil is conducting a comprehensive assessment of the impact of developments in the microfinance sector on its outstanding ratings on MFIs. Crisil has outstanding ratings on 12 MFIs and has rated nine securitisation transactions originated by MFIs. Rating or outlook changes, if any, will be announced shortly, it said while putting the MFI sector on its credit alert. The surveillance process ensures ongoing monitoring of all sectors, and involves frequent interactions with issuers to understand trends and track actual performance against projections, it said.
Crisils rating of MFIs factors in their market position, capital adequacy, resource-raising ability, asset quality, management and systems evaluation, earnings, and liquidity. Along with these company-specific factors, Crisil also evaluates the external and regulatory environment in the MFI sector. Crisil has consistently highlighted that as an emerging sector, the MFI industry is exposed to risks relating to changes in the political and regulatory environment,” it said.
It said Crisils ratings of MFIs take due cognisance of these risks and challenges.
Rs 60 cr Notional loss for SKS
SKS Microfinance on monday said it was unable to recover loans from borrowers due to stringent norms imposed by the Andhra Pradesh government, though dismissing the resultant Rs 60 crore loss as “notional”. Company officials clarified that no real loss was suffered and the notional loss was only on account of extending the loan repayment period by one week to 51 weeks.
URL: http://www.indianexpress.com/news/Rating-agency-puts-MFIs-under-credit-alert/702479