Microfinance institutions operating in Andhra Pradesh have been under RBI scanner since quite some time. With the RBI delegation hitting the state for inspection regarding the issue, these MFIs have been heard of preparing best to present a healthy state of affairs to the regulator.

Sources say that since these MFIs have been forced to mend their ways by the recent ordinance issued by state government, they have started developing ways to offer extension in repayment period to defaulters as well as potential defaulters.

Most of the MFIs in the state have been carrying out collections on weekly basis which the state government is not in favor of. It has set this as one of the vital factors in increasing the burden of repayment on borrowers.

The industry recovers the loans given to the borrowers - mostly women groups - in 50 weekly installments.

"There is no problem for the MFIs to recover the loan between 18 and 24 months. The exact tenure depends on the difficulty of the borrower in repaying the money and also on the company's business model," a source associated with the sector, said.

"The game is about giving out the same pool of funds available with an MFI multiple times. For instance, about Rs 10,000 crore in AP is recovered at the rate of Rs 200 crore every week for 50 weeks. That Rs 200 crore is given out as loans to fresh borrowers. That's where the available funds are maximised. The monthly repayments are bound to hit the business cycle of the MFIs," another source associated with an NGO offering micro loans said.