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Crackdown on functioning of micro finance institutions demanded

By Staff Correspondent
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DIBRUGARH, Nov 20 - Several thousand women today demanded a crackdown on the business practices of Non-Banking Financial Companies (NBFC) and so-called Micro Finance Companies (MFI) in the State, alleging that the money lenders were largely ruining the rural economy, destroying social fabric and creating a law-and-order situation with irrational interest rates and coercive recovery methods in the garb of empowerment.

Thousands of rural women, mostly from SHGs led by the AASAA, KMSS, AJYCP, AATSA, Tai Ahom Chatra Sanstha, Tai Ahom Yuva Parishad Asom, MASS and Pragatishil Nari Sanstha staged a five-kilometre march from Khanikar bypass intersection to the office of the Deputy Commissioner here in protest against the lending institutions. The protestors demanded that the State government intervene in the matter.

Rustom Kujur, vice president, AASAA who has been leading the protest against the alleged disparaging policies of the micro finance companies since September last said that the lenders are offering credits to the gullible rural masses, particularly women from SHGs without collecting the borrower�s income certificate or even knowing the latter�s income source. �The micro finance companies have been offering more than five loans to a single borrower. The rules of credit are neither explained to the borrowers nor do they give the borrowers copies of the agreement in Assamese. The borrowers are asked to pay exorbitant rate of interest on a weekly instalment basis. The lenders have neither provided skills nor asked for any specific scheme from the borrowers. There are instances that on defaulting, the interest collection agents have snatched away cycles, cooking gas cylinders, adult pigs and even CGI sheets from the homes of the defaulters,� said Kujur.

Dhajya Konwar, general secretary, KMSS said that if one studies the lending system of the microfinance companies in the State, one can easily find that 99 per cent of the borrowers have been pushed to penury. �Borrowers are made to sell their properties to pay off their loans. How can a borrower start paying interest rate of 20-30% one week after getting the loan? Even if you rear broiler chicks, you need to wait for three months to sell them. The credit policies of the lenders are not at all people friendly. They are doing business here to loot the innocent rural masses only. We are demanding that the micro finance institutions do responsible and ethical business to help the rural economy and not to ruin lives of the families and for this to happen, the government must act immediately,� the KMSS leader said.

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Crackdown on functioning of micro finance institutions demanded

DIBRUGARH, Nov 20 - Several thousand women today demanded a crackdown on the business practices of Non-Banking Financial Companies (NBFC) and so-called Micro Finance Companies (MFI) in the State, alleging that the money lenders were largely ruining the rural economy, destroying social fabric and creating a law-and-order situation with irrational interest rates and coercive recovery methods in the garb of empowerment.

Thousands of rural women, mostly from SHGs led by the AASAA, KMSS, AJYCP, AATSA, Tai Ahom Chatra Sanstha, Tai Ahom Yuva Parishad Asom, MASS and Pragatishil Nari Sanstha staged a five-kilometre march from Khanikar bypass intersection to the office of the Deputy Commissioner here in protest against the lending institutions. The protestors demanded that the State government intervene in the matter.

Rustom Kujur, vice president, AASAA who has been leading the protest against the alleged disparaging policies of the micro finance companies since September last said that the lenders are offering credits to the gullible rural masses, particularly women from SHGs without collecting the borrower�s income certificate or even knowing the latter�s income source. �The micro finance companies have been offering more than five loans to a single borrower. The rules of credit are neither explained to the borrowers nor do they give the borrowers copies of the agreement in Assamese. The borrowers are asked to pay exorbitant rate of interest on a weekly instalment basis. The lenders have neither provided skills nor asked for any specific scheme from the borrowers. There are instances that on defaulting, the interest collection agents have snatched away cycles, cooking gas cylinders, adult pigs and even CGI sheets from the homes of the defaulters,� said Kujur.

Dhajya Konwar, general secretary, KMSS said that if one studies the lending system of the microfinance companies in the State, one can easily find that 99 per cent of the borrowers have been pushed to penury. �Borrowers are made to sell their properties to pay off their loans. How can a borrower start paying interest rate of 20-30% one week after getting the loan? Even if you rear broiler chicks, you need to wait for three months to sell them. The credit policies of the lenders are not at all people friendly. They are doing business here to loot the innocent rural masses only. We are demanding that the micro finance institutions do responsible and ethical business to help the rural economy and not to ruin lives of the families and for this to happen, the government must act immediately,� the KMSS leader said.

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