SKS Microfinance, a non-banking finance company, witnessed a sharp rise in share price on Friday after the company announced a 1% reduction in the interest rate charged to borrowers from 20.75% to 19.75% with effect from Dec. 7, 2015, for all future disbursals.
With this, the company becomes the first micro finance institution to charge a sub-20% interest rate on its core Income Generating Loans (IGL) which are unsecured micro loans. Interest rate of 19.75% is the lowest rate charged by any private sector MFI in the world.
This is the fourth interest rate reduction, aggregating 4.8%, announced by the company since October 2014. The reductions are consistent with the company's policy of passing on the cost advantages accruing from reduction in the cost of borrowing and economies of scale to its borrowers.
Shares of the company are trading at Rs 447.00, up Rs 23, or 5.42% at the Bombay Stock Exchange (BSE) on Friday at 10:52 a.m.
Total volume of shares traded on the bourses today was higher by 22.91% to 2,562,468 compared with 22-day average volume of 2,084,784.