Borrowing cost up 1.2-1.5% for small finance cos despite liquidity: Crisil

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The perception of risk is hard to shake off when it comes to funding small and mini finance companies, which serve those at the bottom of the pyramid. Despite lower interest rates in the market as a whole, their average cost of borrowings rose by 1.2-1.5 percent between fiscal 2018 and 2021, according to a Crisil analysis.

The second Covid-19 wave has likely intensified the pressure points for small and mini non-banks. The Reserve Bank of India injected Rs 5.75 trillion into the system to fight the pandemic and keep interest rates soft.

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