AP issues ordinance to rein in Microfianance institutions

AP issues ordinance to rein in Microfianance institutions

Christened 'Andhra Pradesh MicroFinance Institutions (regulation of money lending) Ordinance, 2010', the Ordinance came into force today with the Governor E S L Narasimhan giving assent to it.

About 30 persons have died in the state in last 45 days reportedly due to the harassment by MFIs, official sources said.

Taking a serious note of the deaths, Chief Minister K Rosaiah convened a special meeting of the cabinet yesterday to adopt the Ordinance.

The ordinance is aimed at regulating the functioning of the MFIs and to come to the rescue of the victims who have been facing harassment from the MFIs, state Rural Development Minister V Vasant Kumar told reporters.

The Ordinance makes it mandatory for all MFIs to register with the district Registering Authority, the Project Director (PD) of District Rural Development Agency (DRDA) for rural areas and PD of MEMPA for urban areas, within 30 days from today.

The MFIs should specify the area of their operations, the rate of interest, the system of operation and recovery, the minister said.

The Registering Authority may, at any time, either suo moto or upon receipt of complaints by Self-HelP Groups (SHGs) or general public cancel the registration after assigning sufficient reasons.