SHG groups are those groups belong to low income generating category of the society. Most of the self-help groups borrowed money from micro finance institutions for finding a way to start small ventures. These small enterprises where their sources of income for their entire family. So, this micro credit facility played a vital role in upbringing the family into the light of society. Hence the individuals in self-help groups have nothing to put for securities to avail loans from micro finance. Each self-help group consists of a group of 7 to 10 members. These members stand for each other as collateral security. Due to the lock down as a result of Covid -19 all that was normal before abruptly stopped. The group members who paid their loan amount on time thwart their payment of loans during the lock down.

Then the RBI announced moratorium for the borrowers for a period of three months. That brings solace among the borrowers from loan repayment for three months periods. A moratorium period is a time period where the borrowers are not supposing compel for the repayment and once the moratorium period gets over, they have to pay the amount with certain percentage of interest for the due interest on the moratorium period. It is a just a temporary suspension from the loan repayment due to the financial crises they have facing due to the lock down. Hence most of the self-help group members are not educated and less exposed to society. They might have no clear idea about what moratorium exactly meant for. There is a chance some of them might misunderstand the concept of moratorium.

⁽¹⁾ in his study states by the end of March RBI announced the moratorium service for the loan borrowers. In this study it shows that 30 Percentage of micro finance borrowers availed the service of moratorium at the beginning of April but eventually by the month of May the ratio raised suddenly to 70-75 percentage. 

Tinesh Bhasin in his writing on the topic moratorium on loans critical for micro finance institution tried to exhibit the problems facing by micro finance institutions due the moratorium. Though RBI announced moratorium for the loan borrowers by the end March and many borrowers availed the service whereas the banks from where the micro finance institutions raise their fund are denied moratorium. This brings a major stress on micro finance institutions and derail their financial positions too. 

S. Sundar in his study he found most of the private micro finance institutions are compelling and insisting the borrowers for the repayment though RBI announced moratorium for first three months from lock down. Most of the borrowers are facing threatening from these institutions and also forcing them to shut down their business or small shops as a warning for repayment. 

STATEMENT OF THE PROBLEM

Moratorium is the most common and familiar term that everyone had heard over the lock down period. And most of the loan borrowers availed that service too. Self-help groups are also offered the same services but most of the members in the self-help groups are uneducated and less exposed to the society. So there is a possibility that they availed the moratorium service without knowing the exact intension behind the moratorium service. This study try to understand the knowledge position of borrowers regarding the moratorium and try to understand their future financial needs and suggestions and solutions for their financial needs. 

OBJECTIVES

1. To study about the level of awareness on loan moratorium among respondents.

2. To analyze the impact of COVID -19 among their professional sector.

3. To know about the forecasting regarding the loan services.

For the research both primary and secondary data are used. Primary data are collected through direct interview and with the help of questionnaire. Secondary data consists of journals, websites and internet.

SAMPLE DESIGN

At Manjery municipality in Malappuram district the number of self-help groups listed under Kudumbashree is 450. Kudumashree is a Kerala state government mission to empower the lower strata of the society. 140 samples are taken for the study. Convenient sampling technique is used for the research. 

FRAMWORK OF ANALYSIS

The collected data are used for analysis. The statistical tools used for analysis in the study are simple percentage, Anova and correlation.

ANALYSIS AND INTERPRETATION

Gender and Age of the borrower

The following table shows the gender and age wise distribution of the borrowers.

Table1: Gender and age of the borrower

Source: Primary data

From the table it is clear that all the borrowers among 140 (100%) are females.

 In age wise distribution 17 (12.1%) are under the age group of 25-30, 25 (17.9%) of respondents are in the age group of 31-35. Half the percentage of borrowers is in the age group of 36-40. And 48 (34.3%) of respondents age are above 40. 

Income of the respondents.

The following table shows the income of the respondents.

Table 2: Income of the respondents

Source: Primary data                

The above table shows the income level of the borrowers. 81 (57.9%) out of 140 respondents shows an income between 5000- 10000. 36 (25%) of respondents having an income greater than 10,000 but below 15,000. 12 (8.6%) of respondents have an income below 20,000 and above 10,000. 11 (7.9%) having an income greater than 20,000. 

Purpose of loan

The following table shows for what purpose borrowers took loan.

Table 3: Purpose of loan

Source: Primary data

Correlation between micro finance borrower’s awareness on moratorium and borrowers’ who availed moratorium.

The following table shows the correlation between the two variables awareness on moratorium and those borrowers availed moratorium. 

Table 4: Correlation between awareness on moratorium and loan availed.

Source: Primary data

The Pearson correlation coefficient value shown in the above table is .008. The positive value indicates a positive correlation between the variable’s borrower awareness about moratorium and the borrower those who availed moratorium. 

Association between level of moratorium and the professions borrower belongs to.

The tables below show the association between the two variables level of moratorium and which profession they belong to.

Hypothesis

H0: There is no significant association between profession of micro finance borrowers and their awareness level of moratorium.

H1: There is a significant association between profession of micro finance borrowers and their awareness level of moratorium.

Table 5: Association between awareness level of moratorium and the profession borrower belongs to.

Source: Primary data

The above table is the result of Anova. In which table value is 0.041 which is less than the universal value of 0.05. So the study accepts the null hypothesis that there is no significant association between the variables and thereby rejects the alternative hypothesis.

Association between micro finance borrower perception on moratorium and need for new loans.

Hypothesis:

H0: There is no significant association between micro finance borrowers seeking for fresh loans and their perception on moratorium.

H1: There is a significant association between micro finance borrowers seeking for fresh loans and their perception on moratorium.

Table 6: Association between micro finance borrower perception on moratorium and need for new loans.

Source: Primary data

When the table of Anova gets greater than universal value we reject the null hypothesis. Table value of the above table is .100 which is greater than the universal value 0.05. Hence this study rejects null hypothesis and thereby accept the alternative hypothesis that there is a significant relation between borrowers seeking for fresh loans and their perception on moratorium.

FINDINGS

1. All the borrowers are females.

2. Majority of the respondents are belonging to the age group 36-40.

3. Majority of the respondents having monthly income below 10,000

4. Majority of the borrowers availed loan for personal purpose.

5. There shows a positive correlation between borrower awareness on moratorium and borrower availed moratorium.

6. There is no significant association between the profession sector the borrower belonging and level of moratorium.

7. There is a significant association between perception on moratorium and need for future loans. 

SUGGESTIONS

• Not all the borrowers are aware about the real concept of moratorium. So the concern authority should provide knowledge about that.

• Provide a better awareness programs for those who seeking fresh loans for start new ventures.

• Interest during the lock down period should be reduced by Micro finance and other financial institutions.

The study shows that moratorium played a vital role during the lock down period. Many of the borrowers are availed the service of moratorium by knowing all the factors of moratorium. Some of the financial institutions provided classes regarding moratorium to their borrowers. This helped them to understand the concept in depth though majority of the borrowers are low educated. The study also shows that moratorium had a great impact on reducing the stress level of borrowers during the period. 

Conflict of Interest: No

Funding: No funding sources

Atmadip Ray, “Micro finance lenders aim at repayment collection, restoring credit cycle amid rising stress reveals the stress facing by micro borrowers for their repayment on this pandemic.” May 26^th 2020, The economic times