Axis Bank – which had gone slow on lending to the microfinance institutions (MFI) post the recent crisis in the industry – now plans to scale up its exposure to the sector. The bank also looks at direct lending to self-help groups.
“We had gone slow on lending to the MFI sector due to the recent crisis. However, with the regulations in place we plan to step up our lending to the sector,” said Ms Shikha Sharma, Managing Director and Chief Executive Officer, Axis Bank. The bank's exposure to MFIs was earlier in excess of Rs 800 crore. She was talking to newspersons on the sidelines of the launch of a financial inclusion programme organised by Axis Bank Foundation and microfinance institution Bandhan here on Saturday.
MFIs have been recently criticised on issues of multiple lending, evergreening of loans, lack of due diligence and coercive recovery practices. Axis Bank, Ms Sharma said, aims to achieve a credit growth in excess of 18 per cent during the current year. “The RBI has projected a growth rate of 18 per cent, we are hopeful of doing better than this,” she said.
Asked about concerns regarding asset quality, she added, “There are no signs of rising defaults in the system at present.”