GUWAHATI, Sept 2: Based on interactions with members, Microfinance Institutions Network (MFIN), the premier industry association for microfinance and an RBI-recognized Self-Regulatory Organization (SRO) has issued an advisory to its Members on important steps to bear in mind while engaging with borrowers after the moratorium ended on August 31. The detailed advisory is a reiteration of points covered in Industry Code of Conduct and Code of Responsible Lending such as fair interactions with borrowers, ensuring transparency, training for employees engaging with borrowers, among several others and also covers safeguards for Covid.
Notably, MFIN members are RBI-regulated entities including NBFC-MFI, Banks, Small Finance Banks, Business Correspondents and NBFCs who provide microcredit to low income households. With COVID 19 impacting the livelihood of these BOP borrowers, the RBI had announced an initial Moratorium till May 31 last and later extended it for a period of three months till the August 31, 2020.
Dr Alok Misra, CEO and Director, MFIN said, “This is an extremely critical time for all of us and we need to tread carefully. While the moratorium is ending, there could be borrowers who might be facing stress. All providers agree that we must continue to show empathy with these borrowers and allow them time to get on their feet, even though credit discipline is important. Simultaneously, we need to handhold those who availed the moratorium and are willingly to repay with relevant documents; revised loan card, accrued interest amount, changes in repayment amounts, schedule, tenure, among others.”