Key Points
Non-banking finance companies and microfinance institutions want theReserve Bank of India to reexamine the threshold relating to annual household income limit for giving micro loans..
The last time criteria relating to the annual household income limit for giving microloans to individual borrowers was revised was in 2022, when it was upped from 1.25 lakh in rural areas and 2 lakh in urban and semi-urban areas to a uniform 3 lakh..
Manoj Kumar Nambiar, Managing Director, Arohan Financial Services Ltd, and Vice-Chairperson of Microfinance Industry Network (MFIN), emphasises that the request to revise the annual household income limit is part of the ongoing discussions with the RBI..
A microfinance loan is a collateral-free loan given to a household having annual household income up to 3 lakh, according to theReserve Bank of India..
