Women protest high rates of interest, micro-finance companies rebut charges

Women are up in arms against the Association of Karnataka Micro-Finance Institutions (AKMI) for charging high rates of interest against loans and for ‘harassing’ them to recover loans. They staged a protest in front of deputy commissioner’s office here on Friday. Representatives of AKMI, however, rebutted the allegations.

A large number of women, under the banner of BJP, staged a protest against micro-finance institutions for charging high rates of interest for loans.

They said most institutions were issuing loans for a group of 10 people without explaining about the norms and also charging interest four times higher than bank rates. “When we refuse to pay the exorbitant interest charged by the institution, they threaten to confiscate our BPL card, Aadhaar card and gas connection cards,” they said.

“A majority of the people who avail loans are farmers and they have been facing a cash crunch because of drought and also because of demonetisation of Rs 500 and Rs 1,000 notes. Cash-strapped farmers have failed to repay loan amounts but money lenders continue to harass them to repay the money immediately. The district administration must consider the issue seriously and take action against AKMI,” they said.

BJP rural unit president Agile Yogesh, Suresh Seege, Savita, Usha, Anasuya, Sudheer, Prabhu and others were also present.

‘RBI guidelines followed’
Denying all allegations, AKMI director Panchakshari told reporters that the institutions were functioning as per norms of Reserve Bank of India (RBI). He said the institutions were not resorting to coercive measures for recovery of loans. “A few people are staging protests to defame the institutions,” he said.“More than 10 associations in the district are working under AKMI and have 3,13,502 women members. The institutions have provided loans to the tune of Rs 556 crore and we are charging interest between 20% and 23%. The institutions obtain loans at the rate of 13% interest from banks and thus it is inevitable to charge more rate of interest for the development of institution,” he said.

AKMI is following RBI guidelines and institutions don’t come under government sector to waive the loan or interest, he said. “We are aware that farmers are reeling under severe drought and have not pressured them to repay the loan,” he said.
Manager B M Pamidi, Sathyakumar, Lokesh, and Ramesh were also present.