Crisil has upgraded the rating of microfinance player ESAF to mfr2 on a scale of one to eight, where mfr represents grading of microfinance companies; mfr1 is the highest rating and mfr8, the lowest.

“The rating reflects the current state of the company to conduct business in a scalable and sustainable manner,” says K Paul Thomas, Chairman and Managing Director, ESAF Microfinance.

Greater regulatory clarity, a stable operating environment and improved fund flow have worked to the benefit of the organisation, he added.

Crisil has endorsed the strong track record of the company in microfinance and social development, experienced board and management, adequate systems and processes, diverse funding profile, and above-average asset quality.

ESAF managed to raise ₹560 crore from banks and through securitisation during the last fiscal. The networth stood at ₹129 crore on March 31 as against ₹62.5 crore a year ago.

Cumulative loan disbursement stood at ₹3,005 during the year. According to Thomas, current capital is sufficient to meet projected growth requirements of the company in the medium term.

However, the company will strive to infuse additional capital to achieve its long-term goals, he added.

ESAF Microfinance is headquartered at Thrissur in Kerala and operates across six States, covering 34 districts and reaches out to more than 6.5 lakh members.

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