MFIs, Assam govt sign MoU for Assam Microfinance Incentive and Relief scheme

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August 25, 2021 2:46 AM

Speaking on the MoU signing occasion in Guwahati on Tuesday, Sarma said the scheme, Assam Micro Finance Incentive and Relief Scheme (AMFIRS), 2021, would involve Rs 12,000 crore credit portfolio, out of which the state government would be required to expend around Rs 7,200 crore.

“AMFIRS is aimed at providing financial relief from the government to the microfinance borrowers in the state to help them continue maintaining good credit discipline in Covid times,” it added.“AMFIRS is aimed at providing financial relief from the government to the microfinance borrowers in the state to help them continue maintaining good credit discipline in Covid times,” it added.

The Assam government on Tuesday signed a memorandum of understanding (MoU) with microfinance lenders for implementation of the microfinance relief scheme for the microloan borrowers in the state. Chief minister Himanta Biswa Sarma on June 18 announced the special relief for microfinance customers and shared the broad contours of the scheme.

Speaking on the MoU signing occasion in Guwahati on Tuesday, Sarma said the scheme, Assam Micro Finance Incentive and Relief Scheme (AMFIRS), 2021, would involve Rs 12,000 crore credit portfolio, out of which the state government would be required to expend around Rs 7,200 crore.

There were 14 lakh microfinance borrowers in the state upto June, 2021, he informed, according to a release issued by the Chief Minister’s Public Relations Cell. “Assam Micro Finance Incentive and Relief Scheme has been devised with an objective to balance long-term view of ensuring continuity of microfinance for supporting economic activities of low income and poor households in the state and providing relief to eligible customers for tiding over current stress in the microfinance sector due to various operational reasons,” the chief minister said.

According to a release from microfinance industry body MFIN, as many as 37 microfinance lenders signed the MoU with the Assam government for joint implementation of the relief scheme. The MoU laid down duties and responsibilities of the two parties – the state government and lenders, including six universal banks, 25 NBFC-MFIs, two NBFCs, and four Small Finance Banks – for ensuring successful implementation of the scheme, MFIN said.

“AMFIRS is aimed at providing financial relief from the government to the microfinance borrowers in the state to help them continue maintaining good credit discipline in Covid times,” it added.

After the special relief announced on June 18, lenders had welcomed it as it is a one-time relief to the stressed customers and not a debt waiver. The scheme will provide incentive to clients who are regular in repayments and help overdue clients become regular.

Speaking on the development, Alok Misra, CEO and director, MFIN, said, “The signing of the MoU after several rounds of discussions is a significant development, demonstrating the intent of the government of Assam and the microfinance institutions in working unanimously towards the welfare of microfinance borrowers in the state.”

MFIN is confident that the implementation of the scheme will ensure continuity of microfinance for supporting economic activities of low-income households in Assam while providing immediate relief to eligible customers for tiding over current stress in the microfinance sector further accentuated by Covid-19 pandemic, Misra said, adding the government’s focus on maintaining credit discipline and responsible finance is evident.

Significantly, although collection efficiency for microloans has been improving on pan-India basis amid Covid-19 pandemic, Assam is still lagging behind.

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