MFIs responsible for 16 suicides: AP govt

As many as 16 deaths have been caused due to coercive practices of microfinance institutions (MFIs), an inquiry by the state government into the spate of suicides has revealed.

“Initial reports from various districts have so far confirmed 16 cases of suicides due to MFIs,” a government official told Business Standard, adding the final number was likely to increase when all the field reports were consolidated. The final report would be ready in two or three days. The investigating team visited the families of the deceased to probe the reasons for the deaths. There are also indications of MFIs being responsible indirectly for some deaths. The official, however, did not identify the erring MFIs saying more data was being collected.

Earlier, Microfinance Institutions Network (MFIN) president and Basix founder Vijay Mahajan, who demanded a detailed probe into the suicide cases by social scientists, had said that “MFIs would atone for the deaths’’ if proved. MFIN had said it would monetarily compensate the families and also take punitive action against the erring staff of the MFIs. If required, the MFI responsible for the deaths would also be expelled from MFIN.

The government had earlier alleged that about 75 borrowers committed suicides in the last two months due to coercive methods of the MFIs to collect payments. Following this, the state government had introduced the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Ordinance, 2010, to protect the borrowers. The state in one of its counters to a petition challenging the provisions of the ordinance had said that some of the MFIs unleashed a reign of terror on the poor if they failed to repay.