While sowing season is in its full swing in Maharashtra, Kerala and Karnataka State, Gujarat and Rajasthan are still waiting for a full monsoon to play, says PH Ravikumar, Non-Executive Chairman, Bharat Financial Inclusion. The company is on track to grow 5 percent this fiscal year, Ravikumar tells CNBC-TV18. He believes Brexit will not impact the rural economy but inflation and growth momentum will, he said. Meanwhile, the company's cost of borrowing is at 9.2 percent currently, same as quarter four, Ravikumar said, adding, it can decline by 25-50 basis points (bps) going ahead.Below is the verbatim transcript of PH Ravikumar's interview with Ekta Batra & Anuj Singhal on CNBC-TV18. Anuj: The hope is that this year will have better monsoon even though it has not played out as per the expectation in the first month but what is the feedback from ground level and how is business looking?
A: Decent because the overall shortfall is expected to be somewhere between 16 percent and 20 percent. The sowing season is in full swing in Maharashtra, Karnataka and Kerala state. Gujarat and Rajasthan are still waiting for the full onset of monsoon. Overall, from demand side this is a segment which is perennially short of funds, whether Rexit or Brexit, it does not make an impact on demand of funds from this segment because they are affected only by three things. One, they are affected by inflation because that directly hits into their savings. Second, the level of activity that is the growth momentum because as long as we are growing at 5 percent plus, it's decent for them and third is the level of liquidity.
On all the three funds, I am not seeing, in the short and medium-term, any impact of Brexit on this segment.
Ekta: Give us a sense in terms of a couple of statistics this quarter. How are your disbursements doing? Is it continuing in terms of the run rate we have seen?
A: Absolutely on track and we are deliberately moderating growth because in the background of what happened in 2010, we are ensuring that there are no perception issues about the sector as a result of which while we can grow faster, we are ensuring that the controls are all in place and the mistakes which were made by the sector in 2010 are not repeated.
Ekta: Your cost of borrowing came down to around 9.2 percent in the previous quarter. So it has been gradually reducing as we speak. What was it this quarter and what do you envisage by end of FY17?
A: It is around the same figure and we do see a downward trend in interest rate and if the direction is maintained, it should come down anywhere between 0.25 percent and 0.50 percent.
Ekta: Can you give us some guidance for FY17 because you did give some profit of around Rs 450 crore odd and you had a tendency of always exceeding it. So is there a chance?
A: Market always like when you understate and over perform. However, we are sticking with the guidance because we are in turbulent times; we do not want to overpromise. We are on track as far as the guidance is concerned.
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