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Brinda lashes out at microfinance institutions

Senior Communist Party of India (Marxist) leader Brinda Karat on Friday came down heavily on microfinance institutions for harassing millions of poor women across the country by charging higher interest rates on the loans taken by self-help groups (SHGs).

Addressing a meeting on ‘Women SHGs in Orissa: Challenges and Opportunities' organised by the All-India Democratic Women's Association (AIDWA) here, Ms. Karat blamed the United Progressive Alliance government at the Centre for formulating policies that were aimed at favouring microfinance institutions.

Educated people, who were running the microfinance institutions in the country, had emerged as a new brand of moneylenders, making huge profits by using the hard-earned money saved by poor women, Ms. Karat said.

Blaming the Centre for granting huge tax exemptions to big business houses and allowing the microfinance institutions to charge interest rates that were much higher than that charged for purchasing luxury cars, Ms. Karat demanded that the rate of interest for the SHGs be not more than 4 per cent.

Needed: legal measures

The government should introduce legal measures with penal provisions to put a check on the non-transparent and exploitative operations of the microfinance institutions. Harassment of SHG members at their hands should be dealt with a firm hand, she said.

Ms. Karat, who released a study conducted by the Orissa unit of the AIDWA on the SHGs operating in the State, said it was a matter of concern that the government did not have concrete data on the number of SHGs in the country. The number of SHGs could be more than 30 lakh at present, she said.

Lokpal Bill

As regards the Lokpal Bill, Ms. Karat said it was wrong to keep the Prime Minister out of its purview. “If the idea of inclusion of Prime Minister within the ambit of the proposed law was advocated in 2001, why is the same being opposed in 2011?” she wondered, while responding to questions from journalists.

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Printable version | Oct 25, 2020 3:04:47 AM | https://www.thehindu.com/news/national/Brinda-lashes-out-at-microfinance-institutions/article13798009.ece

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