The Hindu : Andhra Pradesh News : Loans given by MFIs put at Rs.3,500 cr.

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Thursday, Oct 14, 2010
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Andhra Pradesh

Andhra Pradesh

Loans given by MFIs put at Rs.3,500 cr.

M. Malleswara Rao

HYDERABAD: The total amount involved in the loans given by Micro Finance Institutions (MFIs) to women self-help groups this year is estimated at Rs 3,500 crore, according to B. Rajasekhar, Chief Executive Officer, Society for Elimination of Rural Poverty (SERP).

He said about 50 MFIs were functioning in Andhra Pradesh.

Some of them were luring SHGs to take big loans, charging interest rates of up to 50 per cent in some cases and resorting to unethical methods to recover the loans. He said the proposed ordinance would exclusively deal with MFI activities vis-à-vis SHGs and incorporate penal provisions for charging unreasonable interest rate and using arm-twisting methods to recover the loans.

Rural Development Minister V. Vasantha Kumar said over 25 persons committed suicide so far in the State due to harassment by MFIs.

He said the MFIs were diluting the SHGs movement for which the Government made relentless efforts. On their part, banks disbursed loans to the tune of Rs 2,358 crore to SHGs at three per cent interest this year as against a Rs 7,500-crore target.

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