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information for prioritizing collection efforts. In Mp, agricultural activity was impacted due to crop damage and borrowers’ income was affected for one Crop cycle. The Bank had initiated settlement programs in the months of March 2020 at specific locations. In Maharashtra, customers from Kolhapur & Sangli belts had started making payments in Q4 after taking three months to recover from the stress. However, collection practices adopted by the Bank have been soft due to political influence in the area.
the state of Assam was affected due to two external events, listed below, which had the combined effect of disrupting the entire state economy and credit lending. This had also adversely impacted the Bank’s customers, like all other microfinance institution customers, which resulted in large scale portfolio stress.
• Student and labour unions protests against MFI’s owing to high indebtedness of microfinance borrowers in Upper Assam
• The introduction of CAA and NRC led to extreme unrest in the entire state including customers from lower Assam, leading to violence for several days and section 144 being imposed during December 2019.
The Bank has undertaken various programs for customer outreach and communication, social development programs, changes in underwriting/credit policies and additional provisioning as risk mitigation measures to address this issue. the Bank had identified 68 officers in February 2020 to move to the role of collections for follow up on potential npA accounts with a collection efficiency of 23%. This focus is expected to continue until the portfolio stabilizes. The Bank has also undertaken relief activities in Jorhat district. Relief activities are planned for customers in Titabor and Golaghat in the ensuing quarter. The Bank is also working on implementing the MFIN relief package across the entire portfolio.
8.1.6.1.1. covid-19: actions taken by the bank (updated as at May 18, 2020)
Moratorium has been provided to all eligible customers (~99% microfinance borrowers) for the period between Mar’20 and May’ 20. Janta Connect – a program to create awareness on moratorium and COVID-19 was undertaken by the Bank during March 2020 and April 2020 through which more than 42 Lakhs customers were contacted. During the lockdown period, the Bank focused on seeking inputs from borrowers through specific surveys to assess the impact on customer livelihoods and probable migration. The Bank surveyed in excess of 90,000 customers with a guided questionnaire during April 14, 2020 to April 18, 2020. Some of the key results of the survey were as follows:
• covid-19 awareness: 91%, with 97% in Metro region and 87% in rural
• Moratorium: 77.6% needed moratorium, 4.6% can pay 1 EMI, 17.8% - do not need moratorium
• income impact during lockdown: Reduced to zero (62%), High Impact (22%), Moderate (7%), Low/ No Impact (9%)
• Worst income impact %: Wage earners (82%), Self- employed (75%), Agriculture (62%), Salaried (39%)
• Migration: 96% - No migration, 2.5% migrated/ returned to native places, 1% planning to migrate or go to native.
These inputs were critical to frame the business and risk management strategy for the future. The Bank has revised its Credit Policy accordingly. Training has been imparted to all the employees of business and credit teams on the Do’s and Don’ts. The Bank intends to focus on serving good repeat customers in the immediate term with a guarded approach for new credit applications. On a priority basis, customers engaged in agriculture and essential services were approached for repeat loan requirements on priority while wage earners and migrant customers will be serviced post normalcy. Independent cross check on loan applications was undertaken through tele-calling. Branch supervisors were trained and re-certified to conduct credit assessment at branch level instead of the usual practice of regional hub and spoke model. Branch working areas were also dynamically updated for operations or otherwise based on ward level information available on containment zones and local guidelines.
Par Movement
5.4
Nov'19
17.3
16.5
Mar-20
15.3 12.7
2.3
10.3
Oct'19
Dec'19
PAR
Jan'20
17,262
Dec'19
Feb'20
7,787
Jan'20
PAR Amount (in cr)
incremental overdue
1,139
5,483
Feb'20
Oct'19 Nov'19
8,545
110 | AnnuAl RepoRt 2019-20
53.8
68.5
62.5
61.7
24.2