MFIs request RBI for emergency credit line as collections take a hit

Seek up to 25% of their outstanding with lending banks, which would help them mobilise Rs 15,000 cr

Microfinance institutions, most of which are feeling the heat as the lockdowns imposed in several states have impacted their collections, appealed to Reserve Bank of India (RBI) for an emergency credit line to tide over the crisis situation.

In a letter to the regulator, microlending industry body Sa-dhan sought an emergency credit line of up to 25 per cent of MFIs’ outstanding with the lending banks, stating this would help microlenders to mobilise Rs 15,000 crore. Such a move will facilitate the immediate flow of funds to MFIs from the commercial banks.  

“Due to increase in lockdowns and impact on incomes of