MFIs pitch for issuance of tax free social bonds by NABARD, SIDBI

Micro-finance establishments have made a pitch for issuance of tax-free social bonds for 5 years by SIDBI/NABARD to completely present debt to the sector working in semi city, rural areas or aspirational districts.

In a pre-Budget memorandum to the Finance Ministry, Sa-Dhan, the affiliation of microfinance sector, additionally made a case for introduction of credit score assure scheme and refinance facility for MFIs by means of the National Bank For Agriculture and Rural Development (NABARD), Small industrial Development Bank of India (SIDBI) or MUDRA.

It has additionally demanded rest of Alternative Investment Fund subscription quantity from Rs 100 lakh to Rs 5 lakh for particular person buyers in order that fund stream to social sectors specifically microfinance, agriculture, water and sanitation, and so forth will be facilitated.

“Issuance of tax-free social bonds for 5 years by SIDBI/NABARD is to exclusively provide debt to MFIs operating in semi urban, rural areas/aspirational districts. This pool of funds will take industry to the next level and will help to uplift lives of rural population with strong wave of financial inclusion,” it stated.

It additionally urged establishing of particular funding window underneath Targeted Long-Term Repo Operations (TLTRO) for MFIs to facilitate stream of long run funding to the sector which may be very important for upscaling disbursements.