Hyderabad, Oct 12 (Calcutta Tube) With more incidents of harassment of borrowers by microfinance companies coming to light, the Andhra Pradesh government Tuesday said it would soon bring a legislation to check the illegal activities of such firms.
The government’s move comes a day after two people committed suicide and another attempted to end his life due to harassment by microfinance firms. Two fresh incidents of harassment came to notice Tuesday.
Minister for Rural Development Vatti Vasant Kumar said consultations were on with legal experts and an ordinance would be issued shortly. The ordinance will be later replaced by legislation.
The minister clarified that the government has no power to force the firms to bring down the interest rate.
Minister for Panchayat Raj Botsa Satyanarayana told reporters that the government has asked police to act firmly with the firms harassing borrowers. He warned that the government would not tolerate any illegal activity by microfinance institutions to recover loans.
Meanwhile, Director General of Police Aravinda Rao said police would take action if the borrowers make any complaint about harassment. He issued directions for keeping a watch on the activities of microfinance firms. ‘We will definitely take firm action if the victims lodge any complaint with us,’ he said.
In one reported incident of harassment in Visakhapatnam district, employees of a microfinance company ‘kidnapped’ a minor girl, Anusha. Her mother complained to Narsipatnam police station that her daughter was lifted by the goons three days ago to force her to repay the loan.
In the other incident in Karimnagar district, employees of another microfinance firm tied a woman to a tree as she had failed to pay the weekly instalment for repayment of her loan.
Opposition parties claimed that dozens of people have committed suicide due to harassment by the firms in recent weeks. They have demanded the government take immediate steps to check the firms. The microfinance firms are accused of luring people with low interest rates. However, they later charge high interest rates, allege the parties.