MFIs staring at cash shortfall of Rs 2,600 crore in Q1FY21, says ICRA

Micro finance companies are running a risk of having cash shortfall of Rs 2,600 crore in the first quarter ending June 2020 (Q1FY21). While their repayments and operational expense obligations are pegged at Rs 8,000 crore in the first quarter, the liquidity buffers on balance sheet are around Rs 5,400 crore, according to rating agency ICRA.

As the collections from borrowers could remain muted for some time post the lockdown is eased, the industry stares at a cumulative cash shortfall. ICRA has analysed a sample of 29 MFIs, which constitute around 70% of the MFI industry on a portfolio basis.