Mon Jan 27 13:25:47 UTC 2025: **Karnataka Women’s Group Demands Crackdown on Predatory Microfinance Institutions**
**Belagavi, Karnataka, January 27, 2025** – The All India Mahila Samskruthika Sanghatane (AIMSS) has called on the Karnataka state government to take swift action against microfinance and private finance institutions accused of harassing impoverished rural families burdened by debt.
AIMSS secretary Gangubai Kokare reported a surge in cases of harassment stemming from loan repayments, with some families abandoning their homes or disappearing to escape loan recovery agents. Over the past six months, several suicides have also been linked to this issue. Kokare highlighted the institutions’ practice of seizing even government-provided incentives, such as the ₹2,000 monthly Gruha Lakshmi scheme payment.
The organization blames the lack of clear regulatory guidelines and coordination as the root cause of the problem, allowing these institutions to proliferate and exploit vulnerable populations through unhealthy competition and exorbitant interest rates.
In a memorandum submitted to the government, AIMSS demanded several measures: a ban on home visits by loan recovery agents, penalties for institutions charging excessive interest, new legislation to regulate microfinance operations, and simplified loan processes for nationalized banks and cooperatives to better serve the poor and middle class. The group also urged increased government funding for key sectors like agriculture, health, education, and housing, along with higher MGNREGA wages, minimum support prices for crops, job creation, and indirect tax reductions to alleviate financial pressures driving people to high-interest loans.
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