It will take another six months for the micro-finance industry (MFI) to completely recover from the effect of demonetisation, which saw collection rates falling substantially resulting in the rise of non-performing assets (NPA).

According to Ratna Vishwanathan, former CEO, MFIN (Microfinance Institutions Network), the NPAs have come down from 23 per cent in the period immediately following demonetisation to 4 per cent at present within a span of one year. This is expected to come down further to 2 per cent moving forward.

“Post February 2017, collection rate of the industry improved to over 90 per cent. Within a span of next six months things should be back on track,” Vishwanathan told newspersons on the sidelines of a microfinance summit organized by Association of Microfinance Institutions–West Bengal (AMFI–WB) here on Thursday.

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