Micro Finance Firms - Business Outrank

The Reserve Bank of India (RBI) has taken a decision to reduce the risk weights on loans given to micro finance firms and NBFCs with an aim of enhancing the credit supply and supporting growth. A lower risk weight means that banks need to hold less capital as safety net against loans. This decision is likely to enhance much needed liquidity to micro finance firms who get their borrowers from the small sector and rural areas. In November 2023 the RBI had tightened the norms for lending by enhancing the risk weights on bank's exposures to NBFCs and micro finance firms. This resulted in a decrease in credit flow and thus, in the lending operations. In particular, the central bank has raised the risk weight by 25 percentage points for bank exposures with assigned rating below 100 percent. After an evaluation, the RBI has now decided to bring back the original risk weights so that the micro finance firms can once again gain access to the crucial funds that they need. It is expected that the move will increase the availability of credit in the sector and facilitate the little businesses, self-employed, and low-income people. The RBI, in a separate circular, has also revisited the risk weights for microfinance loans to also support the recovery of the sector. Thus, the central bank has eased these norms to strengthen financial inclusion and to offer respite to the entities that have faced tough regulations over the past year. As the lending conditions are getting better, it is expected that the micro finance firms will pick up the momentum and this will be accretive to the millions of small borrowers in the country.

What's Hot

How Does Mini Gastric Bypass Surgery Differ from Traditional Gastric Bypass?

AI Copyright Win for Meta as Judge Sides Against Authors

Amazon and eBay Under Fire for Selling Unsafe Ebikes in UK

Virus Susceptibility in Species: Study Reveals Surprising Findings

Effective Yoga Poses to Naturally Manage Blood Sugar Levels

Health Budgets Of States Fall Below 8%, Missing National Health Policy Targets

The Connection Between Diet and Organic Skincare – Foods for Healthy Skin

Priyanka Chopra’s Stunning Desi Look Steals the Spotlight at Her Brother’s Wedding Festivities

Jana Nayagan: Vijay Wields a Whip in Stunning 2nd Look Poster, Thrilling Fans

Assam’s Jatin Goswami Honored with Padma Bhushan for Sattriya Legacy

Vijay Vikram Singh Urgently Appeals for Respect Amidst Intense Backlash from Rajat Dalal Fans: ‘I Am Not Bigg Boss

Hindon: Incredible Air India Express Flights to Start from March 1 with Low Fares

Indian government approves Singapore Airlines bid to merge Vistara and Air India

Independence Day and Raksha Bandhan Fuel Airbnb Travel Rush

Virus Susceptibility in Species: Study Reveals Surprising Findings

Hindon: Incredible Air India Express Flights to Start from March 1 with Low Fares

Bachchan’s ₹83 Crore Duplex Sale Sparks Unbelievable Investment Growth

Kartik Aaryan’s Fitness Secret: How He Achieved a Stunning Transformation

Browsing: Micro Finance Firms

RBI Eases Lending Rules to Boost Micro Finance Firms’ Growth

How Does Mini Gastric Bypass Surgery Differ from Traditional Gastric Bypass?

AI Copyright Win for Meta as Judge Sides Against Authors

Amazon and eBay Under Fire for Selling Unsafe Ebikes in UK

HDB Financial Launches ₹125 Billion IPO, One of India’s Largest in 2025

Our Picks

How Does Mini Gastric Bypass Surgery Differ from Traditional Gastric Bypass?

AI Copyright Win for Meta as Judge Sides Against Authors

Amazon and eBay Under Fire for Selling Unsafe Ebikes in UK

Most Popular

How Does Mini Gastric Bypass Surgery Differ from Traditional Gastric Bypass?

Harvesting Hope: Rahul Gandhi’s Empathy in Action with Farmers before 2024 Elections

Is Modi Afraid? Congress Leader Accuses PM of Targeting Rahul Gandhi

Subscribe to Updates

What's Hot

Browsing: Micro Finance Firms