MFI collections rebounds by 70-75% after Covid-19 restrictions ease: Report

It further said to create a buffer for potential pandemic-related credit costs, MFIs are expected to focus on raising additional equity capital over the near to medium term

The collections of microfinance institutions (MFIs), which had plunged to near zero in April because of the coronavirus lockdown, rebounded to 70-75 per cent in July on account of gradual lifting of restrictions, says a report.

"Collections had wallowed in single digit through May because of the moratorium granted by MFIs to their borrowers on an opt-out basis, but sprang to 55-60 per cent in June and continues to improve," the report by ratings agency Crisil said.

While the bounce-back has been faster than that envisaged earlier, improving it to the pre-pandemic levels of 98-99 per cent would be an