Nirmala Sitharaman is all praises for Assam microfinance deal, CM says it's a win win for all 

GUWAHATI: The recently signed micro-finance deal between Assam government and micro-finance institutions(MFI) has been anticipated to bring out crucial outcomes.

Finance Minister Nirmala Sitharaman too has expressed her appreciation. Thanking the Finance Minister, Assam Chief Minister Himanta Biswa Sarma said, "Assam loan relief and incentives is a landmark, an unique clean up exercise in this segment, a win win for lenders, borrowers and ensures healthy credit culture. 26 lakh women and families who have taken micro loans will benefit."

Apart from the waiving off, there are many aspects that sets this deal apart.

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As cited by economist Rouhin Deb in a report, a total of 25,000 will be given by the government to all the standard borrowers having outstanding debt of 1.25 lakh to 3 lenders as relief. Nearly 24.2 lakh out of the 26 lakh borrowers have less than 1.25 lakh of oustandings to three lenders. Under this deal, regular borrowers will also be benefitted. 

The state government will fund some share of the outstanding bill of the the regular borrowers just a few months after the loan turns standard. The cost of the whole exercise is estimated at a cost of 8,250 crore. The rest is expected to be eliminated.

Regular borrowers are also set to get relief and the State will pay the EMI of the defaulters.

One of the advantages of the process is that both borrowers and lenders will be backed by the government.

Along with guaranteed incentivisation of regular clients, the microfinance deal of Assam also looks into the NPA clients to undo the break.

The handling of the whole initiative depicts the state's government goal to ensure credit discipline in the state.

By introducing the micro-finance deal in the state, Assam has paved a path for all the other states to follow.

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