Date: 31.03.2020

In view of the outbreak of COVID-19 and the resulting impact on the lives of clients, the Board of Virutcham Microfinance Limited approved the following Policies, in line with RBI Regulatory Package and the directives in this regard from Sa-Dhan, being supportive measures in benefit of the clients.

1. Moratorium for payment of Instalments:

The company has collected about 90% of the receivables from the clients for the month of March, 2020. The company was not able to collect the dues falling from the dates from 23rd March, 2020 onwards due to the lock down and Statement Governments announcing holiday period for loan recovery by Micro Finance Institutions. The Board of Directors also aware of the hardships faced by the clients in terms family economic situation, possible health issues etc and the board empathy with them.
The company has fully paid the dues it has to pay for the lending institutions for the month of March, 2020. The company has requested the Banks and the Financial Institutions to give moratorium in line with RBI directives. Some of the Financial Institutions have turned down the request and insisting for making repayments as per the agreement and continue to pay the monthly instalments in the month of April, 2020 also.
Analysing all the above, the Board decided to take the following steps in the coming days.

i. To declare moratorium period until 31st May, 2020, in principle, in line with the directives of the RBI.

ii. To completely postpone collecting the recoveries until 14th April, 2020.

iii.All Centres/Members shall be given the Bank Account details of the Company and those clients who are willing to make the repayments shall be educated and encouraged to do so in cashless mode like internet banking and through various payment platforms.

iv. After 14th April, 2020, Field Officers shall collect the dues from clients, who are willing to pay and inform those clients who are not able to make repayments that their dues are postponed till 31st May, 2020. But interest shall accrue for the moratorium period.

v. A declaration shall be obtained from the clients who are willing to repay without availing moratorium and would be interested to voluntarily commence repayment.

vi. Regular Collection and Centre meetings shall be started from 1st June, 2020 onwards.

2. Providing new repayment schedule

i. Existing repayment schedule shall be modified and new repayment schedule shall be issued reflecting the moratorium and the extended tenure of agreement.

ii. A new agreement shall also be executed with the clients in line with the changed repayment schedule.

iii. The clients shall be duly sensitized on the moratorium and revised repayment schedule to avoid any frauds at client or staff level.

3. Collection of Accrued Interest

The interest for the moratorium shall be collected in three forms at the option of the clients.

i. Interest part of the instalment shall be collected in the months of April’20 and May’20 if the clients expressed their willingness to do so after obtaining declaration from such clients.

ii. If the clients willing to pay the accrued interest in one or two instalments after 31st May, 2020 it will be collected as such.

iii.If the clients want to amortize the interest along with the future instalments, a new repayment schedule incorporating the amortized interest shall be issued to the clients.

iv. The accrued interest shall not be included with the Principal Outstanding amount and thus interest for the accrued interest shall not be collected.

4. Impact on Credit History of the Clients

New repayment schedule clearly indicating the moratorium shall be issued and necessary steps shall be taken that the Credit Information Companies do not show any adverse impact on the credit history of the clients.

5. Support to Clients in distress

i. The company shall extend support to needy clients by way of further loans but strictly in adherence to “Code of Responsible Lending” and “ Code of Conduct”.

ii. The company shall look for resources to support the needy clients with support other than loans.

The above stated policies shall be shared with the Staff Members at all levels and its implementation shall be monitored by the General Manager and the Audit and Risk Manager.