30 suicides in 45 days to escape microfin agents
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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 lives.

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 place.

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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