|Chennai||Rs. 25020.00 (0.81%)|
|Mumbai||Rs. 25890.00 (0.98%)|
|Delhi||Rs. 25200.00 (-0.2%)|
|Kolkata||Rs. 25480.00 (1.03%)|
|Kerala||Rs. 24800.00 (0.61%)|
|Bangalore||Rs. 25000.00 (0.81%)|
|Hyderabad||Rs. 25080.00 (1.09%)|
The future of micro lenders in Andhra Pradesh looked bleak if the state government did not act fast, said Microfinance Institutions Network (MFIN) Chief Executive Officer Alok Prasad.
The net worth of Andhra Pradesh microfinance institutions (MFIs) would be negative by the end of the financial year if the government continued to maintain silence over the proposals made for the revival of the industry, Prasad told mediapersons here on Tuesday. MFIN and Small Industries Development Bank of India (Sidbi) had suggested measures to resolve the crisis, Prasad said, but the state had not responded.
MFIs in Andhra Pradesh plunged into a crisis following the state passing a legislation regulating their activities in 2010.
The proposals made by MFIN include restructuring of loans, involving reduction in interest rates, writing off accumulated interest of about Rs 1,800 crore and extending the term of the loans up to four years.
Prasad said Sidbi had also made a similar proposal to the state government, which “informally” said it was a good package. But no other response has come. “It is like a deafening silence.”
The activities of the microfinance industry have come to a standstill in the state. Credit disbursals, which were Rs 7,000 crore before the crisis, are “zero” today. “Now, there is significant evidence that, because of cessation of activity by MFIs, the poor are approaching moneylenders. I don’t think anybody will argue this is a good thing,” Prasad said.
In this context, he emphasised the need for the stakeholders to sit together and work out a solution. “We have to break the logjam.”
With this view, MFIN and the Centre for Economic Social Studies held a colloquium on microfinance here today. Speaking at the conference, former member of the Planning Commission and the National Advisory Council, C H Hanumantha Rao, said “we should try to understand where we have gone wrong” in the case of microfinance. National Statistical Commission Chairman R Radhakrishna said credit should lead to improvement in productivity. “Let us look at how to re-engineer MFIs,” he added.