MICROCAPITAL BRIEF: In India, MFIs, State Government Agree on Assam Microfinance Relief, Incentive Scheme for Women Borrowers Struggling with COVID-19 Impacts

The government of the Indian state of Assam recently announced it has reached an agreement with 38 microfinance institutions (MFIs), many of which are members of the self-regulating Microfinance Institutions Network (MFIN), to launch the Assam Microfinance Incentive and Relief Scheme (AMFIRS). For those who have been late repaying their microloans, the “relief under the scheme shall be extended to… loans from up to three lenders and for loan amount[s] of up to INR 1.25 lakhs [USD 1,710].” In recognition of those who have managed to make their payments on time, the program will offer a “one-time incentive to the extent of their outstanding balance, subject to a cap of INR 25,000 [USD 340].” Approximately 2 million women are expected to qualify for the program.

The CEO of MFIN, Dr Alok Misra, stated, “We are confident that the implementation of the scheme will ensure continuity of microfinance for supporting economic activities of low-income households in the State while providing immediate relief to eligible customers for tiding over current stress in the microfinance sector further accentuated by COVID-19 pandemic. The government’s focus on maintaining credit discipline and responsible finance is evident.”

The participating MFIs include two non-bank financial companies (NBFCs), four small finance banks, six universal banks and 25 NBFC MFIs.

Established in 2009 and based in India, MFIN has the mission of encouraging “the robust development of the microfinance sector by promoting responsible lending, client protection, good governance and a supportive regulatory environment.” As of March 2020, MFIN’s 48 members operate 14,275 branches across India and report an aggregate gross loan portfolio of INR 744 billion (USD 10.2 billion).

By Harriet Ritchie, Research Associate

Sources and Additional Resources

Government of Assam press release
https://dipr.assam.gov.in/sites/default/files/swf_utility_folder/departments/dipr_webcomindia_org_oid_4/menu/document/govt._inks_mou_with_mfis_and_banks_to_waive_microfinance_loans_of_poor_women_borrowers.pdf

MFIN press release
https://mfinindia.org/assets/upload_image/news/pdf/Press%20Release%20-%20Microfinance%20Industry%20signs%20MOU%20with%20Government%20of%20Assam.pdf

Government of Assam homepage
https://iprd.assam.gov.in/

MFIN homepage
https://mfinindia.org/

MFIN 2019-2020 annual report
https://mfinindia.org/assets/upload_image/publications/AnnualReports/Annual%20Report%20%202019-20.pdf

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