Andhra Pradesh - Vijayawada   

State Government urged to rein in MFIs

Staff Reporter

VIJAYAWADA: A roundtable on private micro-finance institutions, organised jointly by the Vyavasaya Karmika Sangham and All-India Democratic Women's Association (AIDWA) here on Tuesday, demanded that the State Government offer loans to members of women self-help groups and farmers at reasonable rates of interest. It demanded that the Government take immediate action against erring micro-finance organisations, which were collecting exorbitant rates of interest from its members.

President of Andhra Pradesh Vyavasaya Karmika Sangham Paturu Ramayya said that organisers of the private micro-finance institutions were borrowing money from scheduled banks and lending it to individuals for higher rates of interest. He criticised that some institutions were running parallel Government in many areas. Since the Government failed to provide loans to the needy, the institutions were making better use of needs of the poor and earning huge money, he said.

General secretary of the AIDWA's State unit K. Swaroopa Rani said that the turnover of the micro-finance institutions was Rs. 1,200 crores in Krishna district itself. The institutions were forcing the borrowers to mortgage land documents and ration cards. She felt that the problems would be solved only if the State Governemnt implemented the pavala vaddi scheme.

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