Budget 2020: MFI industry seeks more refinance from DFIs

MFIs SOUGHT WITHDRAWAL OF GST

The industry has also sought withdrawal of GST on credit disbursements by banking correspondents (BC), which the micro-lenders do on behalf of banks, said P Satish, executive director of Sa-Dhan, an association of MFIs."We have requested the Centre that in the upcoming budget the government should allow more refinance by DFIs such as SIDBI and Nabard to the MFI sector," Satish told PTI''. Photo: Reuters

200-ODD MFIs WORK FOR BANKING CORRESPONDENTS

Many of 200-odd MFIs operating in the country work as BCs for the banks for credit disbursements for which an 18 per cent GST is levied on overall borrowing by beneficiaries, he said. Photo: Reuters

 

GST WITHDRAWAL FOR CREDIT TO THE POOR PEOPLE

Satish said if GST is withdrawn, the MFIs can provide credit to the poor people at cheaper interest rates."Presently, the poor people have to pay more interest rates for loans taken from such BCs", he said. Photo: Reuters

MFIs DEMANDS FUND

The industry has also urged the government to create a dedicated fund for MFIs which are financing water and sanitation projects. Photo: Reuters

FUNDING FOR WATER AND SANITATION PROJECTS

"Around 50 to 60 MFIs are doing the funding for water and sanitation projects for the poor people. In this context, we have requested the government to create a dedicated fund so that MFIs can borrow at lower rates and give cheaper loans for the projects", he said. Photo: Reuters

 

MFI HAS BEEN GROWING DESPITE A SLOW-DOWN

According to Sa-Dhan, the MFI industry has been growing well despite a slow-down in the economy.Harsh Srivastava, CEO of MFIN, another association, said that the microfinance industry is doing a lot of work towards promoting financial inclusion programme of the government."In the budget, we are seeking support for purchasing POS (point of sale) machines from the budget. They should be either subsidised or given free", he added. Photo: Reuters