Microfinance firm Grameen Koota reduces interest rates

Mumbai, 8th June 2016: Grameen Koota Financial Services Pvt. Ltd, a Bengaluru based microfinance company, has announced reduction in its interest rates and will now be providing loans at 18% for education, water and sanitation. The rate cut is a part of company’s social objective to pass on benefits of low operational costs and reduced borrowing costs to its customers. The new rates of interest came into effect from June 1, 2016. Grameen Koota has also reduced the core income generation loan rate by 1% from 23% to 22%. The company started its operations in Maharashtra in 2008 and currently has 102 branches in 23 districts of the state.

With this Grameen Koota borrowers will get education, water and sanitation loans at 18%, a significant 200 basis points reduction from 20% which were charged earlier. For the financial year 2016-17, Grameen Koota aims to disburse over Rs 800 crore under socially-focused loan products with the new reduced pricing.

Speaking on the announcement Udaya Kumar, Managing Director and CEO, Grameen Koota said, “We have been working continuously on operating efficiency, so as to ensure better pricing to our customers. Coupled with our financial performance, social rating, MFI grading and credit rating, all our lenders are able to support us with improved pricing, which we are able to pass on to our customers. We continue to focus on primary education, sanitation, safe water and family welfare along with income generation loan products to our customers. Our services also include awareness building on financial literacy safe water, sanitation across our operating area to our customers and family.”

Supporting Grameen Koota’s move to reduce interest rates, Ratna Vishwanathan, CEO, MFIN said,” Pricing is a core aspect of any industry in the business of provision of goods and services. In an industry like microfinance it assumes greater significance as clients are from low income households. The fact that Grameen Koota has been able to bring their price to 18% especially for areas like education, water and sanitation speaks of their commitment to clients and greater agenda of financial inclusion and social development. They have brought down cost of operations by optimising processes and leveraging on technology and passed on the benefit to clients.”

Headquartered in Bengaluru, Grameen Koota has 334 branches serving 1.4 million customers, with plans to add 70 more branches by the end of 2016. From social performance perspective, Grameen Koota’s flagship social awareness program ‘Jagruthi’ has reached 1.2 million customers as of March 2016.

Non-banking financial company – micro finance institutions (NBFC-MFIs) have continuously worked towards ensuring access to easy finance to the needy customer in a responsible and inclusive way. Microfinance Institutions Network (MFIN), the premier industry association and Self-Regulatory Organisation (SRO) for the microfinance industry in India works towards ensuring fulfilling of these twin responsibilities of client protection and responsible lending by its member NBFC-MFIs.