Muthoot Microfin Cuts Lending Rates By Up To 125 Basis Points

Muthoot Microfin Ltd. has reduced lending rates by 25 basis points for income-generating loans and by 125 bps for third-party product loans, the microfinance institution said in a press release on Wednesday.

The new interest rate for IGL is 23.05% and for TPP is 22.7%. The revised rates will apply to loans sanctioned from Dec. 3. This was Muthoot Microfin's third interest-rate reduction in 2024 after previous cuts of 55 bps in January and 35 bps in July, according to the company.

The move underscores the company's commitment to passing on the benefits of reduced funding costs to its borrowers, furthering its goal of making financial services more accessible and affordable, it said.

"With such borrower-first initiatives, Muthoot Microfin aims to remain at the forefront of making affordable credit solutions accessible to underserved communities," Chief Executive Officer Sadaf Sayeed said.

Sayeed said this latest rate reduction demonstrates Muthoot Microfin's aim to foster long-term economic growth and make formal credit accessible.

"These rate cuts reaffirm our long-term strategy of empowering our customers and driving transformative change in the microfinance sector," Managing Director Thomas Muthoot said.

Muthoot Microfin currently serves 3.4 million active customers through 1,593 branches across 20 states and 369 districts.

Shares of Muthoot Microfin rose as much as 1.91% during the day to Rs 193.49 apiece on the National Stock Exchange. It closed 0.06% higher at Rs 189.98 per share, compared to a 0.04% advance in the benchmark Nifty. The stock has fallen 24.36% on a year-to-date basis.

Two analysts tracking the company have a 'buy' rating on the stock, according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 36.9%.