Lok Sabha Question No. 3740 (UNSTARRED), answered on 2017-03-24
Subject: Effects of Demonetisation on Micro Finance Industry
Ministry: FINANCE
Asked by: CHANDRA PRAKASH JOSHI

## Govt. of India Ministry of Finance

## Department of Financial Services

## LOK SABHA

## UNSTARRED QUESTION No. 3740 TO BE ANSWERED ON THE 24 th  March, 2017 / Chaitra 03, 1939 (Saka)

## Effects of Demonetisation on Micro Finance Industry

## QUESTION

3740. Shri Chandra Prakash Joshi:

Will the Minister of FINANCE be pleased to state:

- (a) whether  according  to  the  report  by  Microfinance  Institutions  Network  (MFIN), demonetization took a heavy toll on cash driven micro finance industry as both the number of loans  given  and  amount  disbursed  fell  significantly  in  the  December quarter;
- (b) if  so,  the  details thereof and loans provided to micro-finance industry during the last six months, State/UT- wise; and
- (c) the corrective steps taken/being taken by the Government in this regard?

## ANSWER (MINISTER OF STATE IN THE MINISTRY OF FINANCE) (SHRI SANTOSH KUMAR GANGWAR)

(a)  & (b): As per MFIN, Micro Finance Institutions (MFIs) disbursed 59.22 lakh loans worth Rs.12,424 crores during Oct-Dec Financial Year (FY) 2016-17 as compared to 79.82  lakh  loans  worth  Rs.14,707  crores  during    Oct-Dec  FY  2015-16.  As  per information  furnished  by  Reserve  Bank  of  India  (RBI),  region  wise  details  of  total borrowings  of  NBFC-MFIs  with  asset  size  more  than  Rs.500  crores  as  at  end  of September 2016 and December 2016 are furnished as per Annex.

(c): RBI has removed all restrictions on cash withdrawl from Current as well as Saving account with effect from January 30, 2017 & March 13, 2017 respectively. Further RBI vide circular dated November 21, 2016 and December 28, 2016 has advised all entities regulated by them to provide an additional 90 days beyond what is applicable for the concerned regulated entity (RE) for recognition  of  a  loan  account  as  substandard,  in specified cases.

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Annex

## Total Borrowings of NBFC MFIs of asset size > Rs 500 Crores

As at end of September 2016

| Region      |   Number of Companies | Total Borrowings (Rs in Crores)   |
|-------------|-----------------------|-----------------------------------|
| Ahmedabad   |                     1 | 511                               |
| Bengaluru   |                     6 | 19,130                            |
| Bhubaneswar |                     1 | 974                               |
| Kolkata     |                     2 | 810                               |
| Chennai     |                     4 | 2,722                             |
| New Delhi   |                     3 | 4,718                             |
| Guwahati    |                     1 | 578                               |
| Hyderabad   |                     3 | 2,335                             |
| Kanpur      |                     2 | 2,413                             |
| Mumbai      |                     3 | 7,518                             |
| Total       |                    26 | 41,709                            |

Source RBI

As at end of December 2016

| Region      |   Number of Companies | Total Borrowings (Rs in Crores)   |
|-------------|-----------------------|-----------------------------------|
| Ahmedabad   |                     1 | 719                               |
| Bengaluru   |                     5 | 19,919                            |
| Bhubaneswar |                     1 | 1,170                             |
| Kolkata     |                     2 | 859                               |
| Chennai     |                     3 | 2,799                             |
| New Delhi   |                     3 | 5,176                             |
| Guwahati    |                     1 | 549                               |
| Hyderabad   |                     3 | 2,331                             |
| Kanpur      |                     2 | 2,705                             |
| Mumbai      |                     3 | 7,932                             |
| Total       |                    24 | 44,159                            |

Source RBI