Micro finance industry slowly overcoming COVID crisis: Industry body

"The MFIs are now slowly overcoming the challenge by keeping in touch and hand-holding customers to wade through the difficult times," an official of the Microfinance Institutions Network (MFIN) said.

The complete stoppage of micro-finance operations from March-end to May due to the coronavirus-induced lockdown had been a big setback, he said.

He said although the MFIs provided moratorium to customers as per RBI guidelines, they were not extended the same by some lenders.

"This caused a double squeeze. However, policy support in the form of TLTRO (targeted long-term repo operations) and special liquidity facility by the apex bank helped MFIs overcome the difficult period," the official said.

The aggregate gross loan portfolio of NBFC-MFIs contracted three per cent in June as compared to March, the industry body said.

It added that in the first quarter of the current fiscal, NBFC-MFIs disbursed loans amounting to Rs 570 crore as against Rs 15,865 crore in the corresponding period a year ago.