Demonetisation effect: Rumours lead to 40% drop in loan recovery in MP’s Sagar | bhopal | Hindustan Times
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Demonetisation effect: Rumours lead to 40% drop in loan recovery in MP’s Sagar

Taking advantage of the Centre’s decision to demonetise high-value banknotes, a number of people are circulating notes and slips among underprivileged people in MP’s Sagar district, saying that there was no need for them to repay loans.

bhopal Updated: Dec 08, 2016 09:37 IST
Rumours have resulted in micro-finance institutions finding it tough in recovering loans.
Rumours have resulted in micro-finance institutions finding it tough in recovering loans.(Pic for representation)

Taking advantage of the Centre’s decision to demonetise high-value banknotes, a number of people are circulating notes and slips among underprivileged people in MP’s Sagar district, saying that there was no need for them to repay loans.

Rumours have resulted in micro-finance institutions finding it tough in recovering loans given to underprivileged people, repayments of which have come down to 40% in the division, said Devesh Sachdeva, a Microfinance Institutions Network (MFIN) board member.

“Sagar is the only division in the country where rumours of demonetisation have affected repayment of loans,” he said.

“Some local leaders have circulated slips saying that borrowers didn’t need to repay loans taken from MFI due to demonetisation and they are even charging a ‘fee’ of `200 from borrowers in the name of getting their loans waived off.

“The rumours have affected the repayment of loans a lot. We have discussed about the problem with chief minister Shivraj Singh Chouhan and he assured us of taking some steps in this regard.”

He said that to deal with rumour-mongers, the Reserve Bank of India (RBI) on Tuesday released a circular, saying that no loans will be waived off due to demonetisation.

The circular come as relief for micro-finance institutes but there is an urgent need of making people aware of it, said Achala Sabyasachi of the MFIN’s state unit. There are over 30 lakh small borrowers in the state who have taken loans worth more than `4,000 crore.