Cash crunch affects Equitas operations
Equitas Small Finance Bank is proposing to diversify its product portfolio to sustain itself in the wake of adverse conditions in the microfinance sphere following the demonetization. While the bank’s finances have grown 40% to `1553.82 crore from `1115.12 crore in the previous financial year, it is facing a sharp slowdown in the microfinance business, according to N. Rangachary, chairman of the bank, who presented the bank’s annual report for 2016-17. The large part of this growth has been for the period prior to demonetization, he added. The bank’s microfinance advances stood at `3293 crore as on 31 March 2017, with demonetization affecting loan disbursements in cash during November and December 2016. Disbursement of loans was restricted to crediting in bank accounts, compared to earlier months when most of the loans were disbursed in cash. Also with cash crunch, the bank experienced increased delinquency.