Orissa MFIs have advanced loans of Rs 1500 cr in 4 yrs

Micro-Finance Institutions (MFIs) operating in Orissa have advanced loans worth Rs 1500 crore in the past three to four years, reaching out to more than two million customers in the state.

Around 35 MFIs are registered in the state out of which 8-10 are functional, with the recovery rate of these institutions being around 95 per cent.

“The loan recovery rate of MFIs in Orissa is as high as 95 per cent. These institutions are giving loans to the people in the range of Rs 5000-Rs 50000 for individual borrowers at an interest rate of 19-25 per cent. Loans are advanced to the people for a period of one year and the customers have the option to repay it either as weekly or monthly installments”, said Mohammad Amin, president of Adhikar, a city-based MFI, covering 70 blocks in 19 districts of the state.

He refuted allegations that the MFIs are adopting coercive methods for recovering the loan amount.Meanwhile, the Orissa government is planning to come out with new guidelines for the operations of the MFIs in the state.

“A meeting is scheduled for the first week of November to finalize the guidelines for operations of MFIs in the state. We have received some complaints from people being victims of the coercive methods used by MFIs to recover loans from them and our guidelines will ensure that such instances d not recur”, said a senior official of the state finance department.