Assam Deal On Waiving Small Loans Soon, Says Chief Minister

Assam will soon sign a Memorandum of Understanding (MoU) with microfinance institutions (MFI) active in the state as promised earlier to compensate or waive off microfinance loans taken by women of the economically weak sections, Chief Minister Himanta Biswa Sarma said

The loan waiver - which was one of the poll promises made by then finance minister Himanta Biswa Sarma ahead of the state elections this year - will mostly consist of reliefs and incentives for nearly 22 lakh debtors so as to not hamper their CIBIL scores, he said.

The chief minister, while speaking to the media in Guwahati, said, "We will ink MOU with companies dealing in microfinance on Saturday."

In the state budget for the current fiscal year, Rs 7,500 crore was earmarked against the total outstanding of Rs 12,000 crore.

The Assam Cabinet had recently approved the incentives announced for microfinance loan relief to the debtors who have been divided into three categories - those regularly paying their instalments, those who have stopped paying after the announcement of the waiver and the defaulters.

"We have evolved a mechanism whereby we will provide on-time assistance of Rs 20,000 to Rs 25,000 to those women who are making regular payments against the loan, a one-time assistance to those who had stopped paying their instalments recently that will include the relief amount and the pending instalments, and we can waive the loans of those who wish, but they will not be able to take any loans in future as their CIBIL score will be affected for being a defaulter," Mr Sarma had said.

As per our estimate, the state government will have to spend close to Rs 5,000 to Rs 6,000 crore for assistance and relief under the loan waiver scheme, the chief minister said, adding, "Within two weeks the whole thing will be finalised."

Chairman of microfinance waiver committee Ashok Singhal had recently said that the waiver will exclude income tax payees, persons availing multiple loans, owners of four-wheelers and those with an annual income of over Rs 1 lakh.

"The loan waiver will come with capping. It will not be a blanket waiver," Mr Singhal had said.