Microfinance companies hit by the ordinance issued by the Andhra Pradesh government to regulate the sector on Friday offered to restructure the loans given to small borrowers, a top official said on Friday.
According to R Subrahmanyam, principal secretary, Panchayat Raj and Rural Development, the representatives of microfinance companies (Microfinance Institutions Network) conveyed their decision on restructuring of loans at a meeting held on Friday.
"Nobody is repaying loans. Microfinance companies have given a proposal for restructuring and want to give some concession to borrowers and have offered to extend the loans for a longer period. The total loan outstanding is Rs 7500 crore," Subrahmanyam said.
He said that the MFIN came with a proposal that loans of above Rs 25,000 and where borrowers feel that they are not able to repay, will be extended to 18-24 months.
He, however, said that the proposal given by MFIN will be taken to the chief minister.
Alok Prasad, CEO, MFIN said that they are in the process of identifying the borrowers who have over-leveraged to ensure that they (borrowers) slowly manage and repay the loan.
He said that the collections in the State have come down to 20% after the Ordinance was issued.