Bangalore-based microfinance firm Grameen Koota, the sixth largest MFI in India, has cut its interest rates in the range of 100 to 200 basis points for its micro loans, effective from June 1, 2016, benefitting 1.4 million customers.
For its core income generation loans, the reduction was 1 percent to 22 percent and for education, water and sanitation loans it was lowered by 2 percent to 18 percent, said the company in a statement.
The new rates of interest charged by Grameen Koota for education, water and sanitation loans will be at 18%, a reduction of 2% from 20% charged earlier. For the financial year 2016-17, Grameen Koota said it plans to distribute more than Rs 800 crore under this segment.
"This reduced interest rate will certainly help our customers to plan and avail more loans and also utilize them more efficiently," said Mr. Udaya Kumar, Grameen Koota’s Managing Director and CEO.
IFC has recently invested up to Rs 135 crore in Grameen Koota in the form of senior debt via subscription to non-convertible debentures (NCD) for a longer tenor of five years than is typically available for NBFC-MFIs for 1 or 2 years.
Headquartered in Babgalore (Bengaluru), the Company currently operates in five States including Karnataka, Maharashtra, Tamil Nadu, Madhya Pradesh and Chhattisgarh across 74 districts through 334 branches.