HYDERABAD: With micro loans collection in Andhra Pradesh coming to a grinding halt, the Microfinance Institutions Network’s (MFIN) proposal to raise a Rs1,000-crore business continuity fund has hit a roadblock as lenders are on a wait-and-watch mode.
MFIN, which said disbursements of loans in states other than AP was affected due to lack of capital, also felt that the purpose of the proposed fund becomes redundant if it materialises afer a month.
Early in November, MFIN said it approached banks to help it set up a Rs 1,000-crore liquidity fund to ensure MFI operations remain unperturbed.
MFIN spoke to four public and four private sector banks namely SBI, SIDBI, Central Bank, Syndicate Bank, ICICI, HDFC, Axis and Yes Bank, to pool up the liquidity and make it available for registered NBFCs across the country.
According to sources, though bankers are not against the concept of pooling in capital, they haven’t given any committment yet.
“The banking community is talking to the Government of Andhra Pradesh and we are not privy to the discussions. But, my sense is that, they(bankers) want clarity as far as collections are concerned,” an MFIN official told Express. AP accounts for about 40 per cent of the total micro lending across the country.
MFIs operations were hit last month, following a spate of suicides in Andhra Pradesh for allegedly employing strong-arm tactics to collect payments.