Hyderabad, March 21
Notwithstanding the decision of local administration of Krishna district in Andhra Pradesh to close down some branches of micro finance institutions (MFIs), Crisil has reaffirmed its ratings on the fixed deposit programmes of Share Microfin Ltd (SML) and Bhartiya Samruddhi Finance Ltd (BSFL), two of the leading MFIs that were also registered NBFCs. Both these MFIs have significant exposure in Andhra Pradesh.
SML has confirmed to Crisil that 12 of its branches in Krishna district were closed down by the district administration. BSFL, which does not have any branches in the district, has confirmed that none of its branches were affected by the Government's action.
In a press release, Crisil said it believes that in the case of SML, the scale of the current developments is not significant enough to materially impact the business and financial profile of the company to merit a rating downgrade.
According to Crisil, the affected loan portfolio of SML constitutes only about 5 per cent of its total loans outstanding.
However, Crisil said it would continue its discussions with the management of the MFI and monitor the scale of current developments.