Despite hardening of general interest rates, there’s some relief for a certain segment of micro loan borrowers by way of lower borrowing costs. A handful of microfinance institutions (MFIs) are reducing lending rates backed by improved efficiency and lower cost of funds.Fusion Microfinance, India’s ninth-largest MFI by outstanding loans, has cut lending rates by up to 140 points from June. It now offers loans at 23% to existing borrowers compared with 24.4% earlier while the rate rate for new borrowers is 23.5% against 24.6% earlier. A basis point is one-hundredth of a percentage point.
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