Guwahati, Aug 25 (IANS): In a bid to provide succour to 14 lakh microfinance borrowers, mostly poor women in Assam, the state government has signed MoUs with 38 Micro Finance Institutions (MFIs) and Banks, officials said here on Wednesday.

An official said that the Finance Department has signed the MoUs with the 38 MFIs and the Banks on Tuesday to implement the Assam Micro Finance Incentive and Relief Scheme (AMFIRS), which was framed to provide relief to poor women borrowers who are not able to return the loan amount of MFIs.

The MoUs would remain in force till March 31, 2023.

Assam Chief Minister Himanta Biswa Sarma said that the new scheme would involve Rs 12,000 crore credit portfolios, out of which the state government would be required to expend around Rs 7,200 crore.

Amongst the prominent MFIs and Banks that signed the MoUs include Microfinance Institutions Network, North East Small Finance Bank, Association of Small Finance Bank of India, Nightingale Finvest Private Limited, Grameen Development and Finance Pvt Ltd, North East Micro Finance Association, Bandhan Bank Ltd, Arohan Financial Services Ltd, HDFC Bank Ltd, Fusion Microfinance Pvt Ltd, L&T Financial Services and Asirvad Microfinance Ltd.

The Chief Minister said that the Assam government in its first cabinet meeting in May formed a committee under the chairmanship of Housing and Urban Affairs Minister Ashok Singhal to fulfil its election promise of waiving micro-finance loan to provide succour to poor women who are not able to return the loan amount.

"Accordingly, AMFIRS has been devised with an objective to balance long term view of ensuring continuity of micro-finance for supporting economic activities of low income and poor households in the state and providing relief to eligible customers for tiding over current stress in the micro-finance sector due to various operational reasons," he said.

According to the MoUs, the CM said that relief under the scheme shall be extended to all borrowers to the extent of loans from up to three lenders and for loan amounts of up to Rs 1.25 lakhs only.

The Chief Minister also said that many people in the state are stressed by private money lenders.

"Keeping this in view, the state government decided to promote borrowing through MFI and Banks only that carry out their operations strictly adhering to RBI guidelines.

The CM also urged the MFIs and Banks to maintain fair practice code of RBI while disbursing loans in future.

Dr Sarma at the same time called upon the people to ensure judicious utilization of borrowed money, the statement said.