Anthony Joseph Samil (30), an auto-rickshaw driver, has been arrested in this connection, Assistant Police Inspector J B Bhoyar of Manpada police station told PTI.
The woman had taken a loan of Rs 10,000 through her daughter from Samil, he said.
He was demanding repayment of the money from the daughter as the woman was unable to pay it.
He allegedly threatened that if the daughter does not repay the loan, he will throw acid on her and also kill her husband, police said.
When Samil visited the mother's house, he sexually exploited the daughter.
Her mother supported the crime as she locked the house door from outside, police said.
Samil sexually abused the daughter repeatedly since July 13 for the next 22 days.
Following a complaint, a case under section 376 (rape) of IPC was registered in this regard, the officer added.
Samil was produced before a court here which remanded him in police custody till August 13, the police officer said.
The mother has not yet been arrested, he said, adding investigations are underway.