CRISIL assigns BBB/Stable rating to Ujjivan bank term loans

crisl 2 150x140 CRISIL assigns BBB/Stable rating to Ujjivan bank term loansMicrofinance Focus, July 30, 2009: CRISIL Ratings has assigned  ‘BBB-/Stable’ rating to the term loans of Ujjivan Financial Services Pvt. Ltd, a Bangalore based Microfinance institution, saying the outlook is stable.
CRISIL expects Ujjivan to improve its competitive position in the microfinance industry over the medium term, given its comfortable capital position, and benefits derived from its management’s experience in the financial services sector, said a press release.
Ujjivan Financial Services Pvt Limited is an NBFC since 2005 engaged in microfinance. It has 127 branches, with more than 295,000 customers and a portfolio outstanding  of Rs.1.7 billion, as of March 2009. In FYE2008-09, the company reported a loss after tax of Rs.6.7 million and a total income Rs.280.35 million.
CRISIL ratings are derived from the experience of its board of directors and senior management, and comfortable status of capital. These strengths are partially offset by Ujjivan’s modest earnings profile, geographic concentration of operations, and exposure to risks inherent in the microfinance industry, the report said.
Positive rating drivers include sustained growth in advances and profitability, without compromising on its asset quality. On the other hand, inability to sustain the improvement in its earnings profile, or steep deterioration in its asset quality, failure to raise adequate resources to fund its planned growth would constitute negative rating guidance.

© 2009, Microfinance News. All rights reserved. 2008-09

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