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‘MF firms driving borrowers to suicide'

Staff Reporter

WARANGAL: The micro financing system is defeating the very concept of empowerment of rural poor women and diluting the Self-Help Group (SHGs) movement.

A study sponsored by the University Grants Commission (UGC) on ‘Micro solutions for macro problem – the role of micro finance institutions in rural development' being carried out by senior academic K. Venkatanarayana, Department of Economics, Kakatiya University observed that micro finance companies were virtually driving the rural poor women to commit suicides.

Prof. Venkatanarayana said as per the Act passed by the Parliament, these micro finance companies could charge little higher than the commercial banks which offer loans at 11 to 12 per cent. However, many micro finance companies were lending at a flat rate of interest that is working out to 26 to 30 per cent which is exorbitant. “This is ridiculous. There is no control or supervision over these micro finance companies. They virtually are sucking the blood,” he rued.

According to him, there were instances in the recent past in Karimnagar, Khammam and Warangal where the study is being done that some borrowers, in order to escape the ‘harassment' from micro finance company, committed suicides.

Shocking

“In one instance at Mahabubabad, a woman who hid herself in a huge basket meant for storing grain when micro finance company representative came to her house, died of suffocation,” Prof. Venkatanarayana said.

He demanded that the State government take up a detailed study of micro finance companies.

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