Microfinance providers (MFPs) effective interest rates are broadly in range of 25 to 40 per cent, however, Microfinance Banks (MFBs) annualized interest rates are within range of 25 to 30 per cent.
The interest rates in microfinance banking industry are market-driven, sources at Finance Division said here on Tuesday.
The sources said Microfinance Banks (MFBs) are regulated by State Bank of Pakistan (SBP) under Microfinance Institutions Ordinance 2001 and SBP's Prudential Regulations for MFBs while Non-Bank Microfinance Institutions (NBMFIs) are regulated by Securities and Exchange Commission of Pakistan (SECP).
Furthermore, SECP introduced separate regulatory framework to regulate NBMFIs by making necessary amendments in current regulatory framework for Non-Banking Finance Companies (NFBCs).
The sources said in this connection, NBFCs have been allowed to undertake microfinance business and a new class of NBFCs i.e. Non-Bank Micro Finance Companies (NBMFCs) has been introduced.