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Do not have any product with 60% interest rate: Sajeev Viswanathan, CEO, Basix
Q: We are sort of startled by the data that seems to be coming out from the AP government; your interest rates are as high as 60% for Basix?
A: That is a complete misinformation. Basix does not have single product which has interest rates of over 24%. In fact, Basix has been in the business of microfinance for over 10 years and we have never had an interest rate over 24% including the loan processing fee the maximum interest rate is at 27 or 28%. So we are also surprised at the information that is floated around.
Massive data conversion exercise had to be carried out to convert through 0.3 million records in a matter of 24 hours to get it across to meet the deadline that was imposed upon us for registration and if it is at all possible that some corruption of data happened. I would expect that responsible authorities would check with us before putting out anything in the domain like this, testing the integrity of an organization like Basix which has been in the business of financial inclusion for several years.
Read the rest of the interview on moneycontrol.com
AP’s microfinance institutions admit to charging up to 60.5%
The maximum interest rates charged by other MFIs are also upward of 30 percent — Share 19.84 percent to 32.84 percent; Asmita: 27.42 percent to 31.8 percent; and Trident: 33.68 percent.
“This shows the contradiction between public claims of MFIs about ‘reasonable’ interest rates being charged by them. It is for the Government to take further steps in the matter,” a senior State Government official said.
Microfinance, macro woes
However, recent controversies do not deter new entrants
Microfinance institutions (MFIs) have lately been in news for all the wrong reasons. First, there was the controversial sacking of the chief executive of SKS Microfinance, which raised $358 million through an initial public offering recently. Then there were reports from rural Andhra Pradesh about more than 50 suicides, allegedly triggered by coercive methods employed by MFIs for loan recovery. Read more on Tehelka