MFI industry hopes repayments to start from June

    Kolkata, May 15 (PTI) The micro-finance institutions
(MFIs), which have been hit severely in the wake of the
coronavirus-triggered lockdown, are expecting that the
repayments of loans given to the borrowers will actually start
from June, an official of the industry body said on Friday.
    Most employees of micro lenders have come back to
their offices in green zones and have been able to establish
contacts with their clients, either over phone or visiting
them physically, Microfinance Institutions Network (MFIN) CEO
Harsh Shrivastava said.
    "No state is disallowing opening of the MFI offices in
green zones. The MFI portfolio is spread across the country
and a substantial portion of that is in the green zones,"
Shrivastava told PTI.
    Since May 4, the begining of the third phase of the
lockdown, employees of micro lenders have joined their offices
in green zones, though collections and disbursements have not
been started, he said.
    The outlook of the industry is good after the
government had announced few measures to prop up the NBFC-MFI
sector, he said.
    "In the rural areas, the clients have incomes and
businesses are taking place. But collections are not happening
due to the moratorium on repayment, which will end on May 31,
2020," he said.
    However, he said emergency loans can be given to
existing clients with good track record.
    The government had announced a special liquidity
support of Rs 30,000 crore with its guarantee, and the Rs
45,000 crore partial credit guarantee scheme will help the
MFIs, he said, adding that it will instil confidence among the
    P Satish, executive director of Sa-dhan, a self-
regulatory organisation of the MFIs, said that two per cent
interest subvention on "Mudra Sishu" loans, announced by the
government, will help the microI borrowers.
    Nearly 70 per cent of these loans have been lent to
the MFI sector, he said.
    Rating agency ICRA said that nearly 50 per cent of the
entire MFI portfolio is in the orange and green zones. PTI dc

(This story has not been edited by THE WEEK and is auto-generated from PTI)