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30 suicides in 45 days to escape microfin agents

Last Updated: Saturday, October 16, 2010 - 00:18

Hyderabad: About 30 persons have committed
suicide in the last 45 days, apparently due to the coercive
methods of Micro-Finance Institutions (MFIs) in Andhra
Pradesh, a shocking figure that prompted the state government
to issue a special ordinance to rein in the MFIs on Friday.

State DGP K Aravinda Rao told PTI that reports of 21
suicide deaths have been received since January this year from
different districts.

However, the figure would rise as a number of suicides
have been reported over the last fortnight.
He indicated that a special cell would be formed in the
state CID to monitor the activities of MFIs.

A senior state government official put the number of
suicides during the last 45 days at 30.

It was the coercive methods of MFIs that led to the
suicide of a large number of victims in various districts of
the state.

The TDP and other Opposition parties alleged that
recovery agents of the MFIs, often rowdy elements, would
insult and manhandle poor people, which forced them to take
the extreme step.

They alleged that the MFIs are charging exorbitant rates
of interest on the principal amount and the borrowers are
caught in a situation where they are forced to borrow from
another lender to repay the existing loan.

The borrowers are soon caught in a vicious circle of
loans which they cannot repay, thus forcing them to end their

TDP leaders alleged that credit flow from banks has
slowed down, which forced the poor to take loans from MFIs.
Chief Minister K Rosaiah held a meeting of state-level
bankers and urged them to step up credit flow to the people.

The state government issued a Special Ordinance today to
regulate the functioning of MFIs.

The ordinance makes it mandatory for all MFIs to register
with the authorities and to submit a monthly statement on the
list of borrowers, the loan amounts given to them and the rate
of interest.

It also prohibits the MFIs from employing anyone without
an identity card for the purpose of recovery and said recovery
personnel should only ask for payment of loans in a public

Meanwhile, SKS Microfinance, which is at the centre of a
controversy after sacking its CEO last week, today said 17 of
its borrowers were among those that have committed suicide,
but stressed that none of them was a defaulter.

"Of the total list, 17 people have had loans with SKS.
But they have not committed suicide because of defaults," SKS
Executive Chairman Vikram Akula said here today.


First Published: Saturday, October 16, 2010 - 00:18
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