Bengaluru, 5th May 2011: Effective today Ujjivan Financial Services is in compliance with the new RBI regulations for MFIs on the interest cap of 26% p.a., processing fee of 1% and discontinuance of security deposit on new loans which are funded under priority sector loans from banks. This will significantly benefit Ujjivan’s customers by reducing the effective cost on their loans.
Samit Ghosh, Managing Director said, “There are some concerns on the other recommended regulations. Firstly, MFls need to be given at least a month for implementing these changes. Second, the minimum two year tenure recommended for loans of Rs. 15,000 or more, will encourage misuse of funds, as majority of loans for customers are for working capital requirements of one year or less. Unnecessarily extending the loan period will ultimately lead to higher defaults, which is not RBI’s objective. Finally, there is concern on the appropriate methodology of implementing the margin cap, which needs to be further discussed and finalized, and MFIs need additional time to comply with this specific requirement.”
Ujjivan continues to have healthy business operations across twenty states, excellent portfolio quality with no exposure in Andhra, and sufficient liquidity to meet all its business requirements.
Note to Editor:
After the first year of profitable operations in 2009-10, Ujjivan voluntarily reduced loan interest rates nationally by nearly 3% p.a. in July 2010. More than 75 percent of the loans are used for small urban businesses and the rest used for varied purposes: housing, education, healthcare and emergencies. It is the largest MFI in Delhi and Mumbai.
About the Company:
Ujjivan Financial Services, a microfinance institution (MFI), started operations in Bangalore in 2005 and is a partner of Grameen Bank, Bangladesh. It serves over 1 Million urban and semi-urban poor customers in 20 states across India through 351 branches and with over 4000 employees. In the last 5 years, Ujjivan has disbursed loans of over Rs.2000 Crores with a repayment rate above 99%. It won the Srijan MFI Transparency Award in 2010 and was ranked #1 in the microfinance industry in 2009 as the Best Place to Work. Ujjivan’s sister NGO Parinaam Foundation provides services such as healthcare, financial literacy and vocational training to the clients. Ujjivan also conducts social development programs in the communities it works in. For more information, visit
For more information, contact:
Ankur Ganguly, Communications Manager, +91.98453.73818 /
Sudha Suresh, Chief Financial Officer, +91.96325.00431 / |
