It will not be preposterous to say that there is perhaps no other sector that has weathered crisis the way Microfinance has. Over the years, Microfinance Institutions have reinvented themselves every time a crisis hits them. Also, the Indian credit information system is far superior to what it was a few years ago. MFIN has been supporting and guiding the sector in overcoming these challenges.

As the microfinance borrowersrepresent low-income households, any unprecedented national happenings with a potential to have an economic impact on their lives, can be detrimental to the whole existence of the borrower. A few cases which needed careful handling were:


November 2016 and the period thereon were tumultuous for the NBFC-MFI sector with ground level implications that affected the smooth flow of the business seen over the previous years. Post the discontinuation of High Value Currency Notes (HCVNs) with effect from midnight of 8th November, the industry was thrown out of gear initially. This was to be expected in a sector which is 99% cash intensive and has a unique doorstep delivery model specifically for the unbanked and underbanked. MFIN identified the risk factorsand designed and developed strategies &policies to measure and mitigate risks that had severely impacted microfinance industry.

The first effort was reaching out to the concerned Ministries and RBI to allow the NBFC-MFI sector to collect old notes for a specified period with a suitable cap per borrower as a sizeable part of the borrower base was from peri urban or rural India where access to banking was low or unavailable.

Issues further aggravated with promises of loan waivers to borrowers. Despite this, a collection of 80%-85% during the period was demonstrative of the value micro credit had in the lives of borrowers. They were aware of the importance of strong credit histories and made their effort to repay the instalments.

MFIN engaged with State Governments at both the Ministerial level as well as the Bureaucracy, the RBI and extensive engagement with the press to quell the surge of disinformation regarding microfinance practices.


With the COVID-19 outbreak hitting the world hard, the pandemic stalled economic activities and India went into the world’s biggest lockdown to curb its spread. Microlenders faced disruptions as their operations is highly field intensive, including home visits, conducting centre meetings and physical collection of cash. A few days preceding to the lockdown witnessed microfinance institutions trying to place business continuity plans however, post lockdown challenges proved to be beyond operational level trying to gauge and minimize the impact.

Like most industries that were impacted, Microfinance was no exception with microlenders being the ones who faced extensive challenges during the crisis. Collections from borrowers had to be stopped with immediate effect .Though the Reserve Bank of India’s three-month moratorium provided them certain relief till 31st May which was further extended to 31st August, the perils of non-repayment of loans loom large when business resumes.

MFIN had to step up its work immediately after the lockdown as Members needed the support with immediate interventions. Simultaneously representations were made to the RBI, Regulatory Authorities, Government, and other stakeholders to seek their support in addressing key industry issues. MFIN took several steps to address the emerging challenges and mitigate the adverse impacts. Efforts were broadly around three focus areas - customer-protection, employee engagement and business continuity.

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