Microfinance Portfolio Drops in Sa-Dhan
- The microfinance portfolio of lenders in Sa-Dhan has recently dropped significantly from ₹4.43 lakh crore in March 2024 to ₹4.04 lakh crore in October 2024.
- The reason of drop is due to a reduction in incremental disbursements and unwinding of borrower leverage.
- Sa-Dhan issued ‘Seven Sankalps‘ in July 2024, providing additional guidelines to its member institutions.
- The Sankalps also prescribe not lending to NPA (non-performing accounts) with an amount greater than ₹3,000, proper checks on loan utilisation, a mandatory employee bureau check for staff hiring, and insistence on obtaining and providing relieving letters.
Sa-Dhan: Self-Regulatory Organization for Microfinance Institutions
- is appointed by the Reserve Bank of India (RBI).
- Primarily aims to promote inclusive impact finance institutions and support low-income households, especially women.
- Created the Code for Responsible Lending (CRL) to improve lending quality and transparency.
- Developed the Credit Assessment Framework for clients (CAF) in 2022.
- Issued the first Governance Manual for the MFI Board of Directors in 2018.
- Contributes to social development goals.
- Addresses gender issues, focusing on women empowerment.
- Supports global and national interest issues like climate change.
- Has about 220 members working in over 600 districts across 33 states and union territories.
Source:
