Naidu demands tab on MFIs; appeals to women not to repay loans | business | Hindustan Times
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Naidu demands tab on MFIs; appeals to women not to repay loans

TDP President N Chandrababu Naidu today appealed to women not to repay loans they secured from Micro-Finance Institutions (MFIs) till the government brought in a regulator to keep a tab on their business.

business Updated: Nov 02, 2010 13:59 IST

TDP President N Chandrababu Naidu today appealed to women not to repay loans they secured from Micro-Finance Institutions (MFIs) till the government brought in a regulator to keep a tab on their business.

"Don't repay your loans till the interest rate is brought down to three per cent as promised by the government. If MFI agents harass you for repayment, tie them up in a room and call the TDP workers for support," Naidu said addressing a public meeting at Uppal here today.

He also demanded that the government put in place a regulator to rein in MFIs, which are facing flak for their coercive measures,leading to a spate of suicides in the state.

Naidu said MFIs borrowed Rs 10,000 crore from banks in the state and claimed to have extended loans to the tune of Rs 12,000 crore.

"The MFIs are conveniently getting money from banks at lower rates of interest. They are disbursing the same money to women but charging interest ranging from 36-60 per cent. Why don't the banks lend the same money directly to the poor at cheaper rate of interest," he questioned.

Though the Andhra Pradesh government grandly announced that it would help women secure loans from banks at three pc interest rate, nothing was happening in reality, he said.

The TDP chief began his three-day tour of Ranga Reddy district from Uppal today to study the woes of MFI victims and also those whose lands were acquired by the government for various purposes. Women members of self-help groups poured out their miseries to Naidu and narrated how they were pushed into a debt trap because of the government schemes.

"Banks are not extending loans, forcing us to depend on MFIs," they told him.