ஆசிர்வாத் மைக்ரோபைனான்ஸ் லிமிடெட்          Asirvad Microfinance Limited          आशीर्वाद माइक्रोफिनॅन्स लिमिटेड         ആശിർവാദ് മൈക്രോഫിനാൻസ് ലിമിറ്റഡ്          ಅಸೀರ್ವಾಡ್ ಮಿಕ್ರೊಫಿನನ್ಸೆ ಲಿಮಿಟೆಡ್          ਅਸਿਰਵਾਦ ਮਿਕਰੋਫਈਨਂਸੇ ਲਿਮਿਟੇਡ          ଆଶୀର୍ବାଦ ମଇକ୍ରୋଫାଇନାନ୍ସ ଲିଃ          আশির্বাদ মাইক্রো ফাইনান্স লিমিটেড

Moratorium Policy 1.0

This document is a Moratorium policy of Asirvad Micro Finance Ltd ( AMF or The Company).


Background
Currently the entire world is severely impacted by the Coronavirus Pandemic (COVID19) where more than 5 lakhs people impacted worldwide and in India it has impacted more than 1200 people and the count is increasing every day. Central Government has recognized the threat of the COVID-19 and pro actively have announced the lock down of 21 days in the entire country to stop the further spread of this virus. This lockdown, however has put a halt on the entire economic activities in India which will have a far reaching impact on Indian economy and especially on our borrowers it will have a severe impact as most of these customers has daily cash flows.
Lock down will have a huge impact on MFI Collections as these collections are 100% in cash and at a doorstep of borrowers.
Action taken by Regulators / SRO
NBFC-MFI Regulator The Reserve Bank of India (The RBI) has assessed the overall situation and pro actively has permitted all lenders including Banks, NBFCs, HFCs and NBFC MFI , to grant 90 days moratorium to all its borrowers. This moratorium can be granted by the company under the duly approved Board Policy on Moratorium
Further , the SRO of MFIs MfiN and SA-DHAN has also advised to all its members to supports its borrowers during this hard times and allow them 90 days moratorium which will help them to re organize their financial activities and come out of the crisis.
These guidelines are enclosed herewith. Further as a Member of MfIN and SA-DHAN it is very important for us to fall in line with other industry players.


Objective and Benefits
The basic objective of this document is to frame a comprehensive Moratorium Policy :
➢ To avail the benefits of the RBI Guidelines available to us as a Lender and as well as a borrower.
➢ To help our borrowers to re organize their economic activities which is also an social responsibility of the AMF.
➢ To follow what the other members of SRO are following and fall in line with Industry.
➢ To evaluate and adopt the best possible option for our Borrowers , Lenders and Company.


PROPOSAL
1) For Our Borrowers :
MFIN, the SRO for MFIs has released it advisory on March 30th. Keeping in view the RBI policy and MFIN advisory, we propose following option for implementation of moratorium as under :-
Treat the amount collected from March 1st to March 23rd as advance collection and push the demand due from March 1st to June 30th by 90 days. Later adjust the advance to those who have paid from March 1st to March 23rd towards June instalment.
In this option, it is presumed that they will recuperate their cash flows as soon as they lock down is lifted. We will start collecting from June 1st in case other MFIs start collection. Clients will pay less moratorium interest. But we need to explain in detail, to clients who have paid from March 1st to March 23rd is treated as advance and convince them they are equally benefitted from moratorium.
Based on our previous experience like Demonetization and political disturbance in Mangalore, we expect that it will take around 2 to4 Months, after moratorium is over, to achieve collection efficiency of around 99%
We will continue to collect demand where customers is willing to pay us through digital platform

2) To Our Lenders – ( On-Books)
Option 1 : To Pay all term loan dues along with interest as and when it falls due for payment without seeking moratorium from our lenders ( INR 505 Cr during moratorium period)
Option 2 : To Seek for a moratorium from all our lenders and defer the payment of principal and interest
3) To Our Lenders – ( Of-Books)
For all securitization deals (30 Outstanding deals) We will have to seek a moratorium for deferment of payables of Approx 600 Cr (P+I) , since we are offering a moratorium to all our borrowers, including those whose receivables are assigned to assignee, and securitization payouts are linked with the actual collection made , seeking moratorium is the only option available. However we will be obtaining the consent of all of our assignee to grant the moratorium to all the underlying borrowers.

RECOMMENDATION
➢ To grant a moratorium of 90 Days to all our borrowers from 1st March ,2020 to 31st May 2020(MFI and MSME).
➢ To seek moratorium of term loan principal and interest from all our lenders which falls due for payment from 1st April, 2020 to 31st May 2020.
➢ To Seek Moratorium on All our Securitisation Deals.

ACTION POINTS
➢ To make necessary changes in the IT System for offering a moratorium to all our customers.
➢ Demand needs to be stopped during the period of moratorium , however interest should continue to accrue.
➢ To write to all our purchaser of pools seeking a consent for offering a moratorium to underlying borrowers.
Board Approval of Policy
This policy is approved by the Board of Directors in the meeting (Through Video Conferencing) held on 1st April, 2020.