With the microfinance sector in Assam being badly hit as a consequence of a drastic fall in assortment effectivity owing to devastating floods, non-bank microfinance establishments (NBFC-MFIs) have approached the State Bank of India (SBI), the convenor of the State Level Bankers’ Committee (SLBC), to convene a gathering to increase mortgage moratorium facility to the affected debtors.
“Collections have been impacted in flood-affected areas as microfinance officials are not able to collect repayment collections from the borrowers. Officials are unable to reach the flood-affected areas,” Manoj Kumar Nambiar, MD, Arohan Financial Services, instructed FE.
Nambiar mentioned NBFC-MFIs have written to the State Bank of India to convene an SLBC assembly. “For a natural calamity situation, there is an RBI dispensation that once the SLBC declares it as a natural calamity, customers have the ability to request for 30 days, 60 days or maximum 90 days moratorium on repayments. SLBC has to document with the state government and the banking community that it is a natural calamity and customers need help. Then the RBI dispensation will come into effect,” he mentioned. Currently, there are as many as 39 NBFC-MFIs (non-banking monetary companies-microfinance establishments) within the state.
According to Nambiar, even earlier than the flood, assortment effectivity for microfinance loans in Assam was a lot decrease in comparison with different states. “In Assam, collection efficiency in terms of full and partial repayments had stood at around 75-80% before the flood, while on a pan-India basis it had been over 90%. In the last one month collection efficiency has further dropped in the state,” he added.
Notably, Microfinance mortgage portfolio for all of the lenders, together with banks and small finance banks, in Assam is at present round Rs 9,000 crore.
“People in Assam normally face floods and cyclones. These types of natural calamities generally impact microfinance collections for two-three weeks. After that things become normal. In the current situation, microfinance customers are not defaulters as officials are unable to reach them,” a microfinance business supply instructed FE.
Source: www.financialexpress.com”