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Stressed assets of NBFC-MFIs to Decline by 14% as of End

Published on May 31, 2022
Current Context: According to a rating agency CRISIL report Stressed assets of non-banking financial companies- microfinance institutions are estimated to have declined to around 14% as of March compared to 22% in September 2021.
Stressed assets of NBFC-MFIs to Decline by 14% as of End
  • The factors like the limited impact of the Omicron variant and many fiscal packages from the government led to a reduction in stressed assets, along with improved collection efficiencies marking a recovery in the asset quality of NBFC-MFIs.
  • It has been calculated as an average of 97-100% in the fourth quarter of last fiscal, which shows as overall monthly collection efficiency was healthy.
  • Resolution Framework 2.0 announced by the Reserve Bank of India (RBI) in the wake of the second Covid-19 wave, paved the way for the microfinance sector to restructure around 10% of its loan book compared to 1-2% earlier.
  • Apart from that, RBI has removed the interest margin cap on lending rates under the new regulatory framework for microfinance loans.
  • It creates flexibility to adopt risk-based pricing which can provide space to further enhance provisioning safeguards if required.


Q.1 According to the recent CRISIL report stressed assets of NBFCs-MFIs are to be declined by how much percentage?
a. 15%
b. 20%
c. 14%
d. 22%
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