Havent gone into the details, but NBFC-MFI “MAY” have benefits of,
- being classified under PSL, enabling them to sell the loans to banks to fulfill their PSL requirements. Though not sure if one require to be NBFC-MFI to sell PSL certificates related to MF.
- SRO participation, standardized regulatory window, protection from local politics. (NBFCs must have this as well for the last one).
- Pricing of loans, collections teams as per regulations (before the current deregulation of loan pricing)
- RBI regulations may say that anyone having MF portfolio of more than 500 cr needs to be classified as such.
- Raising funds from impact investors, NABARD and other MF targeting schemes. This can help reduce funding costs.
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