Despite the state government’s announcement of a slew of Covid-19 restrictions to curb the rapid spread of infections, microfinance players do not expect any further hiccups in operations, including selection, in Maharashtra.
MFIN, the microfinance industry group, believes that the state government’s stringent restrictions imposed on Monday would have “no impact” on collections in Maharashtra.
“Collections will be unaffected because the Indian government has deemed microfinance to be an essential service. Microfinance community meetings are now held in groups of no more than five members, according to Covid protocols. I don’t see any issues for Maharashtra’s microfinance players, ” according to MFIN’s CEO and director, Mr Alok Misra.
Collections occur at the joint-liability group (JLG) level in all countries, with no more than five people.
According to Misra, the microfinance industry’s collection efficiency has improved to more than 90% across India, except Assam and a few West Bengal pockets. Some major microfinance players reported that their collection efficiencies in Maharashtra, the worst-affected state by Covid, have remained slightly lower than the national average because the state continues to record many cases.
“The new Maharashtra restrictions would not affect because microlenders have already modified their collection model.” There are no longer any large-scale neighbourhood gatherings. On occasion, they also make cash collections at people’s homes.”, Bandhan Bank’s MD and CEO, Chandra Shekhar Ghosh, said.
Sa-Dhan, an RBI-recognized self-regulatory body for MFIs, claims that MFIs can operate in Maharashtra in the same way that banks do. “However, it (stringent restrictions) can affect income flows for industrial microfinance borrowers. On Tuesday, we will hold consultations with member MFIs,” executive director P Satish told FE.