The Kerala Association of Microfinance Institutions (KAMFI) has said that the microfinance crisis cropped up due to some unfortunate happenings in Andhra Pradesh seemed to come to an end, as banks have started lending to microfinance institutions (MFIs).

After the embargo in lending by commercial banks to microfinance sector, the RBI had issued guidelines on microfinance lending inter- alia directing banks to resume lending to microfinance sector and treat them as priority sector advances, Mr K. Paul Thomas, Chairman, KAMFI, said in a statement.

Recently, the State Bank of India sanctioned Rs 45 crore and Central Bank of India sanctioned Rs 20 crore to ESAF Microfinance, the largest MFI from Kerala with 4.5 lakh clients, said Mr Thomas who is also the Managing Director of ESAF Microfinance.

“We don't have any operations in Andhra Pradesh although we have presence in seven States. So our operations were not affected due to the AP crisis,” he said, adding that ESAF was one of the very few MFIs which received continuous support from banks even during the AP crisis.

ESAF Microfinance and Investments (P) Ltd., is primarily engaged in providing micro-credit to the poorer sections through a network of 150 branches across the country. As on March, ESAF Microfinance has a membership of 4.5 lakh clients spread across 35 districts covering seven States with a total loan outstanding of Rs 210 crore.

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