Digital lenders offer loan pay breaks to cushion customers against COVID-19

Mobile-based lending institutions from Digital Lenders Association (DLAK), which represents 17 major digital lenders in the country, Monday agreed to waive the late repayment fees as part of the measures to support customers during this time of the COVID-19 outbreak.

The move will cushion the customers who are under distress, following the slowdown in the economy after disruptions to their day to day operations that could have had an effect on regular income flow.

A moratorium, also known as repayment break or holiday, is a legal authorization to debtors by a lending institution to postpone payment at an agreed later date.

Availing a moratorium will ordinarily not entail any change in the existing terms and conditions of the loan and if the existing terms and conditions of the loan contain charges or conditions related to a moratorium, then these may apply depending on the repayment freeze policy by the lending institution.

Customers are advised to seek more detailed information on the specific aspects of the waiver from their respective providers.

The Association also supports the Presidents’ directive on the temporary suspension of the listing with Credit Reference Bureaus (CRB) of any person, Micro, Small and Medium Enterprises (MSMEs) and corporate entities whose loan account falls overdue or is in arrears, effective 1st April 2020.