MFIN flags rise in false loan waiver campaigns, backs RBI advisory

MFIN has backed the RBI's advisory against misleading loan waiver campaigns amid rising misinformation and borrower mobilisation efforts in parts of North India

Amid an increase in organised misinformation campaigns falsely promising loan waivers and financial relief measures, the Microfinance Industry Network (MFIN), a self-regulatory organisation for the microfinance industry, on Wednesday welcomed the Reserve Bank of India’s (RBI’s) latest advisory cautioning against such misleading practices.

 

MFIN said it has observed an increase in organised misinformation campaigns and borrower mobilisation efforts in recent months, particularly across parts of North India. In several instances, borrowers have been influenced into withholding repayments based on misleading claims related to loan waivers, the so-called “Coin Act”, or other unauthorised interpretations circulated through informal networks and local groups.

 

 

Alok Misra, chief executive officer (CEO), MFIN, said, “The Reserve Bank of India’s advisory is timely and significant in safeguarding borrowers from misleading campaigns that falsely promise loan waivers or encourage disruption of repayment obligations. Such activities undermine the credibility of the formal credit system and ultimately harm the interests of borrowers themselves. MFIN and its member institutions have been consistently undertaking borrower awareness initiatives and organising Microfinance Awareness Programmes (MFAPs) across India to educate customers on responsible borrowing, repayment obligations, financial literacy, and grievance redressal mechanisms.”

 

MFIN highlighted the increase in organised misinformation campaigns and borrower mobilisation efforts in recent months, particularly across parts of North India. In several instances, borrowers have been influenced into withholding repayments based on misleading claims relating to loan waivers, the so-called “Coin Act”, or other unauthorised interpretations circulated through informal networks and local groups.

 

The RBI, in its advisory, said the continued occurrence of such campaigns through various media channels and direct outreach by certain individuals and entities not only misled the general public but also interfered with the orderly functioning of the country’s credit system. Further, these campaigns involved false promises of waiver of outstanding dues to banks and non-banking financial companies (NBFCs), issuance of “debt waiver certificates” or similar documents, and collection of fees under various pretexts, including service or legal charges, from uninformed members of the public.

 

MFIN added that it will continue to strengthen borrower awareness and financial literacy at the grassroots level through sustained outreach initiatives, including Microfinance Awareness Programmes, aimed at enabling customers to make informed financial decisions and safeguard themselves from misleading and exploitative practices.