AP Government to act tough against erring MFIs

Andhra Pradesh Chief Minister K Rosaiah today directed district collectors in the state to act tough against microfinance institutions (MFIs) that fleece poor borrowers, particularly in rural areas.

Addressing Collectors through a video-conference from the Secretariat here, he said the government has brought in an ordinance that makes it mandatory for MFIs to register their activities with the specified authority (District Rural Development Agency) in each district.

Rosaiah pointed out that several persons had committed suicide in the recent days as they were unable to repay the loans borrowed from MFIs because of the "usurious rate of interest and also harassment from the lenders."
   
"Hitherto there was no authority to rein in the MFIs that charged exorbitant rates of interest and adopted illegal means to recover dues from borrowers. Now that an ordinance has been promulgated with wide-ranging powers, the collectors should be vigilant and take every legal step to keep a tab on MFIs," the Chief Minister said.
   
One way of keeping a check on MFIs was increasing institutional lending to the poor in rural areas, Rosaiah said.
   
The Chief Minister also asked the Collectors to ensure that farmers got the minimum support price for paddy produced in the kharif season.

The Chief Minister told the district collectors, "Leave no room for any complaint. Take all steps required to ensure that farmers got the MSP. See that the millers and traders did not exploit the farmers and deprive them of a remunerative price."
   
He wanted women self-help groups to be involved in the paddy procurement process.
   
"Most of the godowns in the state are currently full as the Food Corporation of India has stocked about 34 lakh tonnes of rice in them. Only seven lakh tonnes of godown space is currently vacant which too will get filled in two or three days as fresh stocks are coming to the market."
   
The state Government has taken up the issue with Union Agriculture Minister Sharad Pawar and sought shifting of rice stocks from godowns to make space for new stocks, he said.
   
The Collectors could hire private godowns as a temporary measure, if required, to accommodate stocks procured this season, Rosaiah said.
   
Chief Secretary S V Prasad, Ministers N Raghuveera Reddy, Dharmana Prasada Rao, Aanam Ramanarayana Reddy and V Vasantha Kumar, among others, took part in the video- conference.