Reserve Bank of India (RBI), in March, had announced a moratorium on repayment of term loans in order to provide relief to loan-takers impacted by the COVID-19 related disruptions. Initially, the moratorium was allowed till May 31 but was later extended till August 31. Now, Microfinance Institutions Network (MFIN) has issued an advisory to its members on engaging with borrowers after the RBI moratorium ended on August 31, 2020. MFIN is an industry association for the microfinance industry.
MFIN members include 56 NBFC-MFIs (Non-Banking Financial Company- Microfinance Institutions) and 40 associates, including banks, small finance banks and NBFCs.
MFIN said the detailed advisory is a reiteration of points covered in Industry Code of Conduct and Code of Responsible Lending such as fair interactions with borrowers, ensuring transparency, training for employees engaging with borrowers, among several others and also covers safeguards for COVID-19.
“There could be borrowers who might be facing stress. All providers (of microcredit) agree that we must continue to show empathy with these borrowers and allow them time to get on their feet, even though credit discipline is important,” MFIN’s CEO and Director Alok Misra.
Misra adds, “There is a need to handhold those who availed the moratorium and are willing to repay with relevant documents; revised loan card, accrued interest amount, changes in repayment amounts and schedule, tenure, among others.”
MFIN, a RBI-recognised self-regulatory organisation, has a Customer Grievance Redressal Mechanism (CGRM) in place wherein any customer can complain on its toll-free number 1800 102 1080.
