The Hindu : Andhra Pradesh News : No forcible recovery of loans: MFIs

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Thursday, Nov 11, 2010
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Andhra Pradesh

Andhra Pradesh

No forcible recovery of loans: MFIs

Staff Reporter

SANGAREDDY: Slowly, but surely, the pressure on Micro Finance Institutes (MFIs) has been increasing and there is a clear change visible in their attitude. The regulations imposed by the State as well as rebellion among loaners in repaying the amounts forced these organisations to think twice before entering the villages.

Instead of threatening the borrowers to pay the amount at weekly deadlines, the representatives of the MFIs were stating that there would be no forcible collection. Recently representatives of an MFI visited Kontur village in Medak mandal and tried to create awareness about their organisations.

According to sources, they informed the villages that they had not came to the village for any forcible loan recovery and it was only make a good understanding among the loaners about the organisations from which loan was extended. “Our activity restarts only after registration process is over,'' they informed the villagers and distributed some pamphlets.

Revised rates

“Collecting loans as well extending loans will commence only after the process is completed. Present your ration card details as well as SHG membership details to extend loans. From here on only 12.5 flat interest rate or 24.55 diminishing interest rate will be collected,'' they explained in the pamphlet promising not to collect any additional amount.

Similarly, villagers were also informed that the family members need not pay the remaining amount if either the member or husband of the member dies before completion of loan repayment as it would be covered under insurance. However, amount already paid to the MFIs would not be returned.

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Andhra Pradesh