No loan waiver promise in Bengal polls relief for MFIs, Bandhan Bank

After the lockdown, borrowers may tend to prioritize cash for daily needs and savings over repaying MFIs.mint
After the lockdown, borrowers may tend to prioritize cash for daily needs and savings over repaying MFIs.mint
 1 min read . Updated: 19 Mar 2021, 12:22 AM IST Shayan Ghosh

The state contributes 47% of Bandhan Bank’s microfinance portfolio, while 16% of its micro loans originate from Assam

Lack of overt references to loan waivers for microfinance borrowers in Trinamool Congress’ (TMC’s) poll manifesto for the West Bengal assembly elections is a relief for micro lenders, as well as for Bandhan Bank, brokerage firm Jefferies said on Thursday.

“TMC’s election manifesto was released recently and touches a range of focus areas like economy, support to low-income groups, agriculture etc. Interestingly, it does not explicitly propose any waiver for micro-borrowers, which should be a relief for microfinance institutions (MFIs) and Bandhan Bank," Jefferies said in a note.

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Elections in West Bengal will be held in eight phases from 27 March to 29 April, and the results will be declared on 2 May. The state contributes 47% of Bandhan Bank’s microfinance portfolio, while 16% of its micro loans originate from Assam, which has passed the Assam Microfinance Institutions (Regulation of Money Lending) Bill, 2020 in December.

Election-bound Assam has also promised a loan waiver. Micro lenders would have been hit badly if other poll-bound states made similar announcements.

The gross loan portfolio of all micro lenders, including MFIs, banks and small finance banks, stood at ₹2.27 trillion as on 30 September, up 17% from a year earlier, according to data from industry body Sa-Dhan.

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