RBI allows micro lenders to borrow overseas

Mumbai: Indian micro-finance institutions will be allowed to raise up to $10 million during a financial year through external commercial borrowings for permitted end-uses, the RBI said on Monday.

Non-government organisations engaged in microfinance activities can avail of external commercial borrowings (ECB) up to $10 million or equivalent a financial year under the automatic route, from $5 million or equivalent earlier, RBI said.

Cartoon: Food security and the economy - What Manmohan told Sonia

"This certainly opens up a new window because banks are still not coming forward to lend money to microfinance institutions. For institutions like us, $10 million will be sufficient. We will explore options to raise funds through this route," Kishore Kumar Puli, chief executive of Trident Microfin, a microfinance institution in Andhra Pradesh, said.

SEARCH