The microfinance crisis, which cropped up due to some unfortunate incidents in Andhra Pradesh seems to have come to an end, as banks have started lending to Microfinance Institutions (MFIs).
After the embargo in lendings by commercial Banks to microfinance sector, Reserve Bank of India had issued guidelines on May 03, 2011 on Microfinance lending inter alia directing banks to resume lendings to microfinance sector and treat them as priority sector advances.
Recently, State Bank of India sanctioned Rs 45 crore and the Central Bank of India sanctioned Rs 20 crore to ESAF microfinance, the largest MFI from the state of Kerala with 4.5 Lakh clients.
“We don’t have any operations in Andhra Pradesh although we have presence in 7 states in India. So our operations were not affected due to the AP crisis.“ says K. Paul Thomas Managing Director ESAF Microfinance and Chairman KAMFI (Kerala Association of Microfinance Institutions).
He added that ESAF was one of the very few MFIs who received continuous support from banks even during the AP crisis. ESAF Microfinance and Investments (P) Ltd, is primarily engaged in providing micro-credit to the poorer sections of the society through a network of 150 branches across the country. The Organization has built its knowledge and expertise in the integrated community development initiatives since its inception in 1995.
As on March, 2011, ESAF Microfinance has a membership of 4.5 lakh clients spread across 35 districts covering 7 states in India with a total loan outstanding of Rs 210 crore.