Updated as on 3rd September 2016
Loan Products details of Group Lending Program:
Note: With effect from 18th April 2016, the earlier loan products i.e, Long Duration - Fortnightly General Loan (LD - FGL), Long Duration Fortnightly Supplementary Loan (LD-FSL), Short Duration - Fortnightly General Loan (SD-FGL), Fortnightly General Loan -18 (FGL-18) disbursements have been discontinued.
Rationale for Interest Rate Model: Having taken into account, factors such as average effective cost of borrowing, other operations cost (including staff cost, administration expenses, etc), cost of loan loss provision / write off, profit margin, and considering interest rate cap / margin cap that is permissible as per RBI rules for microfinance companies, it has been decided to charge interest rate of 25% per annum on declining balance on all microloans given by the Company. Further the Company may give interest rebate as may be appropriate from time to time keeping in mind the permissible margin cap as per RBI guidelines, and reasonable maximization of value for the Company's borrowers in their struggles to pull themselves out of poverty in a financially sustainable manner. All microloan borrowers of the Company are considered as being in the same single category of borrowers from a risk premium perspective, and accordingly are charged the same rate of interest.