Microfinance Industry Slowly Overcoming Covid-19 Crisis, Says Industry Body
The country-wide lockdown due to the Covid-19 pandemic has been a challenge for the microfinance industry sector, but it is slowly tiding over the crisis now, an official said on Wednesday.
"The MFIs are now slowly overcoming the challenge by keeping in touch and hand-holding customers to wade through the difficult times," an official of the Microfinance Institutions Network said.
The complete stoppage of micro-finance operations from March-end to May due to the coronavirus-induced lockdown had been a big setback, he said.
He said although the MFIs provided moratorium to customers as per RBI guidelines, they were not extended the same by some lenders.
"This caused a double squeeze. However, policy support in the form of TLTRO (targeted long-term repo operations) and special liquidity facility by the apex bank helped MFIs overcome the difficult period," the official said.
The aggregate gross loan portfolio of NBFC-MFIs contracted 3% in June as compared to March, the industry body said.
It added that in the first quarter of the current fiscal, NBFC-MFIs disbursed loans amounting to Rs 570 crore as against Rs 15,865 crore in the corresponding period a year ago.