Gadag (Karnataka), Feb 2 (PTI): In a decisive step to protect borrowers from alleged harassment by microfinance companies, Karnataka Minister for Law and Parliamentary Affairs, H K Patil, announced on Sunday that a draft ordinance has been prepared and sent to Chief Minister Siddaramaiah for approval.
Addressing reporters in Gadag, Patil revealed that once the Chief Minister gives his nod, the ordinance will be forwarded to Governor Thaawarchand Gehlot for final clearance.
Ordinance to Tackle Harsh Loan Recovery Tactics
The state government has taken this step following multiple reports of borrower distress, including suicides and forced displacement of rural borrowers due to aggressive loan recovery tactics."Microfinance companies have been using inhumane methods to recover money from small borrowers, causing immense suffering. The government has now prepared a suitable ordinance to curb these oppressive recovery practices," Patil stated.
Microfinance Companies Accused of Outsourcing Harassment
Chief Minister Siddaramaiah had previously pointed out that microfinance companies outsource loan recovery to third-party agencies, which allegedly resort to coercion and force. The government’s intervention follows a series of incidents where people, unable to bear the pressure, fled their homes or even took extreme steps.Kannada Activist Alleges Political Nexus with Microfinance Firms
Meanwhile, prominent Kannada activist Vatal Nagaraj staged a protest in Mysuru, condemning the actions of microfinance companies. He alleged that politicians have invested their black money in these companies, enabling them to operate with impunity.The state government's ordinance is expected to bring much-needed relief to borrowers and regulate unethical recovery practices. All eyes are now on Chief Minister Siddaramaiah’s decision, which will determine the next course of action.
