Bengaluru-based Microfinance Institution (MFI) Grameen Koota could write-off bad loans to the tune of Rs.100-Rs.150 crore following the inability of borrowers to repay them. The MFI, which has over 1.65 lakh members has outstanding loans amounting to Rs.3,075 crore, with around 3-5 per cent of this amount likely to be written-off.
Women are the primary beneficiaries of loans offered by Grameen Koota, with collateral-free loans on offer to boost their livelihood. Demonetisation played a key role in the inability of borrowers to repay loans, with lack of money on the ground hitting the poor hard.
The board of directors will meet on May 17 to discuss the possibility of a write-off, with Grameen Koota looking to set aside a sum of Rs.100 crore for this purpose.
MFIs across the country typically see loan write-offs in the range of 1 to 10 per cent on account of non-payment.
Grameen Koota, established in 1996 saw Bangladesh’s Grameen Bank as an early investor, aiming to replicate the success of the Bangladeshi MFI model. In addition to offering products like income generation loans, family welfare loans, home construction loans, etc., it also provides insurance and pension options.
It also conducts workshops and organises healthcare programs. Currently operational in the five states of Chhattisgarh, Karnataka, Tamil Nadu, Maharashtra, and Madhya Pradesh, it has 393 branches and close to 5,000 employees.
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