Microfinance Institutions Network (MFIN) has issued an advisory to its members on engaging with borrowers following the end of Reserve Bank of India (RBI)'s moratorium on August 31, 2020.
The industry association for the microfinance industry released the advisory in this regard on Tuesday, September 1.
The RBI had, in March this year, announced a moratorium on repayment of term loans to provide relief to borrowers impacted by the COVID-19 related disruptions.
The moratorium was initially allowed until May 31 but was subsequently extended until August 31.
MFIN further stated that the exhaustive advisory reiterates points covered in Industry Code of Conduct as well as Code of Responsible Lending, for instance ensuring transparency, training of employees engaging with loan borrowers, fair interactions with debtors, among several others. The notification also covers safeguards for COVID-19.
"There could be borrowers who might be facing stress. All providers (of microcredit) agree that we must continue to show empathy with these borrowers and allow them time to get on their feet, even though credit discipline is important," MFIN's CEO and Director Alok Misra said in the release.
"There is a need to handhold those who availed the moratorium and are willing to repay with relevant documents; revised loan card, accrued interest amount, changes in repayment amounts and schedule, tenure, among others," he added.
MFIN, an RBI-recognised self-regulatory organisation, has a Customer Grievance Redressal Mechanism (CGRM) in place wherein any customer can complain on its toll-free number 1800 102 1080, the release added.
MFIN members include 56 NBFC-MFIs (Non-Banking Financial Company- Microfinance Institutions) and 40 associates, including banks, small finance banks and NBFCs.