Microfinance Focus, January 3, 2010: Challenging the recent ratings downgrade by CRISIL, Bangalore based microfinance institution Ujjivan Financial Services has issued a statement saying that it strongly objects and completely disagrees with CRISIL’s general downgrading of five MFIs across the board including Ujjivan without proper evaluation of individual MFIs.
Ujjivan which operates in twenty states & union territories claimed that it has no operations and no loan exposure in Andhra Pradesh. “Our loan portfolio has continued to improve during this industry crisis and our cumulative repayment rate improved from 99% to 99.12% in November 2010. We have consistently met all loan servicing requirements to all our lenders on or before time”, it said.Contradictory to the widespread liquidity crunch faced by the sector, Ujjivan continued to receive fresh funding from institutions both in India and from overseas post-Andhra Ordinance and are not affected by the current liquidity crisis, the company’s statement said.
Ujjivan also believes that the contention that the Reserve Bank of India and Ministry of Finance have not been supportive of the microfinance industry especially those not operating in Andhra during this crisis totally inconsistent with reality.
Ujjivan continues to enjoy strong business operations across twenty states in India, excellent portfolio quality, and more than sufficient liquidity to meet all our contractual loan servicing requirements. Under these circumstances to be lumped together with four other MFIs and downgraded is unwarranted and without merit, it feels.
After the first year of profitable operations in 2009-10, Ujjivan voluntarily reduced loan interest rates nationally by nearly 2-3% p.a. Nearly 75 percent of the loans are used for small urban businesses and the rest used for varied purposes: housing, education, healthcare and emergencies. It serves over 970,000 urban and semi-urban poor customers and has disbursed over Rs.1700 Crores of loans in the last five years.