The Assam government is all set to bring in a law that will prevent agents of microfinance firms to show up at the homes of borrowers to recover loans, Finance Minister Himanta Biswa Sarma said on Wednesday.
“Recently, a group of women from a joint-liability group met me and narrated that agents torment them at their houses for recovery of loans. Within one month, we will bring a law which will forbid these agents from going to the homes for recovery of loan, Mr Sarma said, speaking at a public event in Kakopathar in Tinsukia district.
This decision comes in the wake of a microfinance crisis that the state saw last year in which there was a spate of loan defaults and financial stress in rural areas.
Studies conducted by the Microfinance Institutions Network (MFIN) in Assam revealed that microfinance borrowers in the state were in over twice as much debt as the national average – a number that went up to four times as much in five districts.
Earlier, Leader of the Opposition in Assam assembly Debabrata Saikia had sought the Assam Governor’s assistance in directing the state government to draft a law to protect the interests of rural people.
“Many of the victims have been forced to resort to distress-sale of livestock, power-tillers, two-wheeler vehicles and even land and houses. Some have been forced to lock their houses and migrate to Bangalore and work in private companies. Few persons have even committed suicide after falling into the debt trap,” Mr Saikia had written to the governor.