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Collateral-free Micro loans
November 2 , 2021
1121 days
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- The Reserve Bank of India has proposed to make micro-lending collateral-free for all the lenders, rather than just for microfinance institutions.
- The current regulatory framework was implemented with the objective of making credit available to low-income households as well for protecting borrowers from harsh recovery practices of the lenders.
- This regulatory framework is applicable only to Non-Banking Financial Company - microfinance institutions.
- In India, loans below Rs.1 lakh are considered small loans or microloans.
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