Microfinance Focus, September 21, 2011: ICICI, HDFC and Axis Bank have decided to waive the personal guarantee clause for four microfinance institutions including Spandana Spoorthy Financial, Asmitha Microfin, Share Microfin and Trident Microfin.

They could however be on the hook in the Rs 7,000-crore debt restructuring if business prospects do not improve dramatically, says an Economic Times report.

The deadline to complete the corporate debt restructuring expires on September 30. The terms of the CDR proposal for each institution will be finalised by next week, the report says.

As per the personal guarantee clause, promoters of microfinance institutions will be held liable for debt obligations in case of a loan default. However, MFIs objected to such a clause and said their personal net worth was not enough to cover the total loan amount being restructured.