Additional Rs 30,000 Crore Debt Funding To Smaller MFIs Likely In 2021-22: Report – Unblendednews

Additional Rs 30,000 Crore Debt Funding To Smaller MFIs Likely In 2021-22: Report


The recent relief measures announced by the Reserve Bank of India (RBI) are timely for the microfinance institutions (MFI) sector. According to a recent report titled ‘Impact Note – MFI sector’ released by the credit rating and research agency Acuite Rating and Research, an additional Rs 3,000 crore debt funding to smaller MFIs likely in the current financial year 2021-22. The fresh restructuring window for loans up to Rs 25 crore is also likely to support the microfinance institutions sector in alleviating the additional asset quality stress arising due to COVID-19.

According to Acuite Rating and Research, the central bank’s recent announcements on the special long-term repo operation or SLTRO of Rs 10,000 crore for the small finance banks will ensure higher direct disbursements to microfinance borrowers and better funding access for smaller MFI with asset size less than Rs 500 crore.

Additionally, the credit rating agency expects a 90-day delinquencies to increase at least by 30 per cent by June 2021, even if the intensity of the COVID-19 pandemic, starts to decrease from the middle of May 2021, and can more than double if the state lockdowns continue till the end of the first quarter of the financial year 2021-2022.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *