Agri Business

CreditAccess Grameen to observe moratorium on loans

Our Bureau Mumbai | Updated on April 03, 2020 Published on April 03, 2020

Bengaluru-based CreditAccess Grameen Ltd will observe moratorium on principal repayments to its lenders between March 30 and May 31, 2020. But the microfinance institution said it has made a prudent decision to continue to pay interest to its lenders during the moratorium period.

Simultaneously, the company emphasised that it has sufficient cash balance of ₹530 crore as on March 31, to sustain business operations over a reasonable period of time.

Under the Reserve Bank of India’s Covid-19 package, borrowers can seek rescheduling of term loans and working capital facilities from lenders on payment of all installments falling due between March 1 and May 31.

The company, in a statement, said it has successfully financed the MMFL (Madura Micro Finance Ltd) transaction in March and honoured all principal and interest payments till March 29 on the back of strong balance sheet position and prudent liquidity management.

CreditAccess added that it has completed the purchase of 76.06 per cent stake in MMFL by paying ₹661 crore in March within stipulated timelines.

The company emphasised that it has sufficient capital adequacy to manage its growth in FY21. There is no immediate need to raise equity and the company can wait for the market conditions to improve over the coming year, it added.

Loan moratorium policy

In accordance with the loan moratorium guidelines issued by RBI on March 27, the company said it has framed its loan moratorium policy, which will be applicable to all the existing borrowers across India.

Moratorium will be allowed on all instalments falling due between March 1 and May 31. For the borrowers who have already paid instalments after March 1, CreditAccess said required adjustments will be made so that moratorium is applicable for the remaining instalments till May 31.

Proven resilience of rural markets

The statement said as on date, there has not been any significant impact on the rural economy, especially in the regions where the company operates.

“The immediate fallout of lockdown has been more severe in urban locations, especially on the migrant population. Reverse migration might create some difficulties with concerned families for a temporary period.

“While this is an unprecedented situation, based on historical experience, rural economy has always been more resilient and capable of returning to normalcy after natural disasters/external disturbances,” the company added.

CreditAccess observed that a larger percentage of rural population is typically self-sufficient, operating within a particular geography, where the production and consumption is largely local.

“Further, majority of rural expenditure is on essentials. In case of any economic difficulties, they are able to manage with captive production/consumption and minimal expenditures.

“Furthermore, various measures announced by the government under the food security/economic relief package will aid the poor/low income households (our customer base) to tide over the temporary difficulties,” it said.

CreditAccess provides micro-loans to women customers, predominantly in rural areas. It is now operating in 230 districts in the 13 States (Karnataka, Maharashtra, Tamil Nadu, Chhattisgarh, Madhya Pradesh, Odisha, Kerala, Goa, Gujarat, Rajasthan, Uttar Pradesh, Bihar and Jharkhand) and one Union Territory (Puducherry) through 928 branches.

Published on April 03, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.