On 17th Apr 2020, RBI has unveiled its package to improve the liquidity post COVID. Through Targeted Long Term Repo Operations 2.0 (TLTRO 2.0) it will make available Rs.50,000 crore to the Banks for supporting NBFCs and MFIs and out of the total Rs.50,000 crore, 50% of this should be given by banks to small and mid-sized NBFCs and MFIs. RBI has also allocated Rs.50,000 crore as special refinance facilities at repo rate (4.4%) to NABARD (Rs.25000 crore), SIDBI (Rs.15000 crore) and NHB (Rs.10,000 crore) for refinancing to RRBs, Co-operative banks and MFIs.

If the funds are to be used fully to benefit the microfinance clients at the bottom of the pyramid, the NEXT MOVE by the Banks, NABARD & SIDBI is crucial and the following aspects may be considered by them while formulating products to help the sectors.