Sa-Dhan, an organisation dealing in micro finance companies has claimed that the Micro Finance Institutions (MFIs) are facing several problems after demonetisation.
Executive Director of Sa-Dhan P Satish told media persons that there are talks that the loanee can deposit his EMI after 2-3 months without any penalty. However, there is no order from the Central government in this regard, he added.
Post Demonetisation, the microfinance sector is facing unprecedented challenges in collecting repayment from of clients. Sa-Dhan has been visiting pockets around India which are having crisis, talking to MFI clients and observing on the ground.
Satish further said that it is clear that in some areas of Madhya Pradesh, Uttar Pradesh and Maharashtra, local vested interests have created an atmosphere instigating the MFI clients not to repay the loans.
There are negative media reports supporting this. The situation is getting even more complex with the new Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances, which is creating confusion amongst the clients.
This very situation is creating space for some local leaders by misinterpreting this information/notification and calling it a loan waiver. Apparently, a set of touts have also emerged, asking money from clients vouching to waive off the loans.
He informed that over the last year, various micro-finance institutions have disbursed loans to the tune of about `4088 crore benefitting over 28 lakh borrowers in Madhya Pradesh.