Crisil puts 12 microfinance firms under watch

Nov 22, 2010 |

Reuters

Tags:

microfinance sector

Bank funding to the entire microfinance industry in India has diminished following a regulatory clampdown on the sector, said Indian rating agency CRISIL, which put 12 microfinance firms under watch with negative implications.

However, risk to Indian banks' non-performing loans from their exposure to MFIs is not material at this stage, Pawan Agrawal, a director at CRISIL, an unit of Standard & Poors, told Reuters in an interview on Monday.

India's fast-growing, largely unregulated microfinance industry, which surged to prominence when George Soros-backed SKS Microfinance raised $358 million in an IPO, is facing a regulatory clampdown that could erode profits and hurt growth.

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