Andhra Pradesh Government to introduce Bill to check rogue MFI’s

2 mins read

Reeling under public outrage and media sensationalism over the recent suicides linked to Microfinance Institutions in Andhra Pradesh, the Andhra government is all set to introduce an ordinance that will make it difficult for microfinance companies to forcibily recover loans from borrowers in the state. The ordinance could also limit the interest rates that could be charged by Microfinance companies.

“The state government will soon introduce an ordinance to control microfinance institutions,” chief minister Rosiah told reporters in New Delhi. “The government has started taking the opinion of legal experts and from the Attorney General ,” he added.

Several cases of violation of fundamental human rights and harassment by microfinance institutions have been reported by the media in the state of Andhra Pradesh. In one alleged incident of harassment in Visakhapatnam district, employees of a microfinance company ‘kidnapped’ a minor girl, Anusha because her Mother had not repayed her loan. Her mother then filed a complaint in Narsipatnam police station that her daughter was abducted three days ago to force her to repay the loan she had taken.

In Karimnagar district, employees of another microfinance firm tied a woman to a tree as she had failed to pay the weekly installment for repayment of her loan. Some journalists claim that over the last few months more than 25 suicides can be directly linked to harrassment from Microfinance Institutions in Andhra Pradesh.

The Communist Party of India(Marxist) which has threatened to launch a political movement against MFI’s in the state,  pointed out that the state government, which had assured financial linkage from banks to the tune of Rs 750 Crore  for 64,000 Self Help Groups (SHGs), had only disbursed Rs 150 crore to only 5,000 SHGs. This shortfall had forced the women Self Help Group members to knock on the doors of the unscrupulous MFIs. Blaming the government for the deaths of innocent farmers and women, the party spokesperson said all the suicides are nothing but “micro murders”.

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Pratima Singh

Pratima is a content writer at Moneymint. As a Finance enthusiast, she loves sharing tips and tricks to help others navigate the financial sphere.