MFIs face loan collection woes
Hyderabad, Oct. 26: Microfinance institutions (MFIs) are facing difficulty in collecting weekly loan installments despite a High Court order allowing micro lenders to conduct their business in the state.
According to industry sources, micro lenders have managed to recover only 40 per cent of the outstanding weekly installment in the state this week.
“The districts, where MFIs are facing public resistance to pay installments, are Karimnagar, Warangal, Khammam, Kur-nool, Chittoor, Prakasam, Guntur, and Visakhapa-tnam,” the sources said.
The micro lenders have stopped disbursing new loans in the state. The official reason is that MFIs are busy with getting ready for registration processes in the state as per the recent ordinance.
Experts, however, claim that the decision to stop fresh lending could be linked to the prevailing uncertainty over loan recovery process in the state.
According to an Microfin-ance Network (MFIN) spokesman, the government has relaxed norms to allow MFIs to apply for registration immediately.
Under the new norms, MFIs need not submit voluminous data along with their application for registration with the District Rural Development Autho-rity. This would make registration process easier.
Apart from Gram Panchayat office, the spokesman claimed that the government has allowed MFIs to collect installments at pension office in view of the sheer size of their customers.
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