Government to forgo loans from poor women: Himanta Biswa Sarma
He said the Assam Microfinance Institutions (Money Lending Regulation) Bill 2020, which has been passed by the state assembly, is awaiting governor approval.
“Once authorized by the governor, we will start the negotiation process with the MFIs (microfinance institutions) and see how the loans can be canceled. The loan amount is around Rs 12,000 crore and we have to see how we can negotiate and reduce the amount, ”Sarma said Monday at a rally in Sasoni in Upper Assam. “The practice of taking out loans as a result of seduction has broken the social fabric in several neighborhoods and ruined many families. We are waiting for the governor’s sign.
The minister said the government has kept Rs 500 crore to overcome the crisis in the MFI sector and if necessary will add an additional Rs 500 crore. “We will forgo loans taken out by poor women. We will see if the waiver can be granted on the principal amount or on the interest part. We have enacted a law that no agent can go to a borrower’s house and look for money. If someone does, there is a provision for imprisonment.
By asking people not to take such loans, Sarma assured that the government would design programs for women and self-help groups and set up revolving funds. “Taking loans from such undocumented businesses increases the problems. Right now we bear the burden of those people who have taken out loans. However, in the future, they have to be careful, ”he said.
The opposition Congress has promised a waiver of loans from MFIs if the party is elected to power in Assam in the next assembly ballots. Assam has seen a wave of defaults and stress in rural households, raising the specter of a repayment crisis that hit Andhra Pradesh in 2010.
Legislation passed by the state assembly aims to protect and relieve economically vulnerable groups and individuals from undue interest rate constraints and coercive means of collection by MFIs or money lending agencies and to create an effective mechanism to regulate these organizations.
The legislation states that lenders must ensure that a borrower who has existing loans from no more than two lenders and a borrower’s current cumulative outstanding amount does not exceed Rs 1.25 lakh. This limit must also be taken into consideration when granting any existing loan with the same client from institutions regulated by the Reserve Bank of India.
For permanent tea garden workers who take out loans from MFIs, total indebtedness will be capped at Rs 30,000 for borrowers who have only one source of income and Rs 50,000 for borrowers who have sources of income. multiple, in accordance with the law.