SKS Microfinance’s credit rating for bank borrowings has been upgraded by a leading rating agency to ‘A1+’ from ‘A1’ for short-term facilities and to ‘A+’ from ‘A’ for long-term facilities for an aggregate sum of Rs 2,000 crore. The company’s borrowings were at Rs 1,456.19 crore as of May 31, 2014. The company expects the upgrade to have a positive impact in terms of reduction in the cost of borrowing.
According to the rating agency, short-term debt instruments with ‘A1+’ rating are considered to have a very strong degree of safety regarding timely payment of financial obligations. Such instruments carry the lowest credit risk.
Further, long-term debt instruments with ‘A+’ rating are considered to have an adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry a low credit risk.
SKS Microfinance (SKS) is a non-banking finance company (NBFC), registered and regulated by the Reserve Bank of India, whose mission is to provide financial services to low-income households. SKS operates across 16 states of India.
