Impose a Ceiling on MFI Interest: Lok Satta

The Lok Satta Party today pointed out that the Andhra Pradesh Government ordinance on micro finance institutions (MFIs) failed to impose a ceiling on the rate of interest they could charge.

Lok Satta Party leaders Katari Srinivasa Rao and V. Laxman Balaji said that apart from stipulating the maximum rate of interest MFIs could charge, the Government should prevent them from knocking at people’s doors for loan repayment. Instead, they should be asked to utilize the panchayat office for loan collection activity.

They welcomed the provision in the ordinance stipulating that MFIs take prior clearance from the concerned authorities before advancing loans to SHG members.