Assam government signs memorandum of understanding with 38 MFIs, banks waive microfinance loans from poor borrowers


The government of Assam signed a memorandum of understanding with 38 microfinance institutions and banks for the implementation of the Assam Micro Finance Incentive and Relief Scheme (AMFIRS), 2021.

The Assam government on Tuesday signed a memorandum of understanding with 38 microfinance institutions and banks to offset and forgo microfinance loans taken by economically weaker women in the state.

The MoU has been signed for the implementation of the Assam Micro Finance Incentive and Relief Scheme (AMFIRS), 2021. The MoU will remain in effect until March 31, 2023.

Chief Minister of Assam Dr Himanta Biswa Sarma said at his first cabinet meeting that the state government had formed a committee under the chairmanship of Housing and Urban Affairs Minister Ashok Singhal, to keep his electoral promise to forgo the microfinance loan to provide support to women who are unable to repay the loan amount.

“As a result, the Assam Microfinance Incentive and Relief Program was designed with the aim of balancing the long-term vision of ensuring the continuity of microfinance to support the economic activities of low-income and poor households. state and provide relief to clients eligible for repair. Current stress in the microfinance industry due to various operational reasons, ”said CM Himanta Biswa Sarma.

CM Himanta Biswa Sarma said that as of June 2021, there were 14 lakh microfinance borrowers in the state. He said the new program would involve a loan portfolio of Rs 12,000 crore, on which the state government would be required to spend around Rs 7,200 crore.

CM Himanta Biswa Sarma said the program emphasizes responsible lending from financial institutions through adherence to RBI regulations and industry guidelines in letter and spirit, while promoting responsible borrowing. and the culture of timely repayment among customers.

Detailing the provision of the MoU, Himanta Biswa Sarma said relief under the program will be extended to all borrowers to the extent of loans from up to three lenders and for a loan amount of up to Rs 1.25 lakh.

Under this program, borrowers who regularly repay zero days late will receive a one-time incentive for their outstanding balance, subject to a ceiling of Rs 25,000.

Likewise, borrowers whose payments are late, the state government will pay the amount. All of these borrowers will be encouraged to make timely installment payments so that their accounts remain standard and the credit culture is strengthened.

To induce such credit discipline, the government, after observing these borrowers for a period of time, would make a one-time incentive payment of Rs 25,000 or equal to the outstanding balance, whichever is less.

In addition, stressed, destitute borrowers whose accounts have become NPA will need to apply through a format verified and certified by the lender. The government will consider granting partial or full relief on the basis of a detailed assessment.

CM Himanta Biswa Sarma also said that many people in the state are stressed by private lenders. “With this in mind, the state government has decided to promote borrowing through MFIs and banks only that conduct their operations in strict accordance with RBI guidelines,” he said.

CM Himanta Biswa Sarma also urged MFIs and banks to uphold the RBI’s fair code of practice while disbursing loans in the future.

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