Hyderabad, November 23: Investigatio n into the spate of suicides reported last month allegedly due to loan recovery harassment has established that of the 107 cases registered 23 were due to coerceive and unethical tactics employed by MFI agents to recover loans. The police have already arrested agents involved in three such cases.
“We are actively investigating all the reported cases. Of the 107 cases registered, 23 deaths were due to harassment by MFI agents,” R Subrahmanyam, principal secretary, Department of Rural Development, told Express.
In 25 suicide cases, MFI harrasment has been ruled out. “The remaining 59 cases are still being investigated,” he explained. The investigations are being jointly conducted by a special cell of the Society for Elimination of Rural Poverty aided by the district task forces and the State police. The inquiries also found that big MFIs such as Spandana Spoorthy, Asmitha Microfinance and Share Microfin are also employing strong-arm tactics for recovery of micro loans.
On October 15, the State promulgated an Ordinance to regulate the industry following a spate of suicides reportedly due to pressure for repayment of micro loans. Subsequently, operations of several MFIs came to a grinding halt as the Ordinance mandated firms to switch from weekly to monthly collections.
As collections were hit, the Microfinance Institutions Network (MFIN) approached banks to help it set up a `1,000 cr liquidity fund to ensure MFI operations remain unaffected.
AP accounts for about 40 per cent of the total micro lending across the country.
–Agencies