Even as the banks are now getting ready to restart their funding for the micro finance institutions, post R6,000 crore of corporate debt restructuring (CDR), MFIs have raised fresh concern over the R14,000-crore exposure the banking industry has for the MFIs outside Andhra Pradesh region.
Microfinance Institutions Network (MFIN) CEO Alok Prasad said, ?We need to understand that the CDR was offered only to the major MFIs based in Andhra Pradesh. It hasn?t come to the microfinance sector at large. Now it must be ensured that the MFIs, that are active outside Andhra Pradesh, must get financial support from the banks.??
According to Prasad, MFIs owe banks R20,000 crore out of which only R6,000 crore has been restructured by the CDR. ?Now the banks will have to look beyond CDR and AP development to provide funding support to the MFIs. Banks and the MFIs have to work as partners so as to promote financial inclusion agenda as charted out by the Reserve Bank of India and the government,?? said Prasad.
Indicating that banks are now willing to resume funding to MFIs, Punjab National Bank CMD KR Kamath said, ?Our bank has got an exposure to the tune of R1,000 crore to the MFI sector and the loan worth R300 crore had gone to the CDR for restructuring. As CDR exercise is over, we are ready to give fresh loans to the sector on case-to-case basis.?
Indian Overseas Bank CMD M Narendra said post CDR, the bank was ready to give fresh loans to MFI borrowers on the need-based requirement.
?Our bank?s exposure to the sector was at R630 crore and a sum of R130 crore had been referred to the CDR cell. Some of our major MFI borrowers include Spandana, Sphoorty, Trident, Share and Asmita,?? added Narendra.