Microfinance institutions get away with farmer suicide abetment charges: Police close a third of the cases in Andhra Pradesh

In 2010, Andhra Pradesh witnessed a series of suicides. These were not cases of farmers' suicides—a regular occurrence in the state which continues to be in the grip of an agrarian crisis. The victims in these cases happened to be the poorest of the poor; most of them illiterate dalits and adivasis. The first information reports (FIRs) of the police reveal that most of the suicides were due to coercive loan recovery tactics adopted by the mighty microfinance institutions (MFIs), that had given these people a few thousands of rupees as loans. Ironically, 2010 happened to be a year in which the micro finance industry registered a spectacular growth. This article by M Suchitra in Down to Earth deals with the issue.
27 Apr 2012
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Article Courtesy : Down to Earth

Author : M Suchitra

As many as 76 suicides, allegedly due to debt recovery-related harassment were reported that year in the state described as the microfinance capital of the country where one fourth of all the MFIs in the country are concentrated. Police cases were registered, many of them under the section 306 of the Indian Penal Code for abetment of suicide. It was pointed out that since the loans were insured, many of the victims were driven to suicide.

Now, one-and-a half years later, at least one third of the registered cases have been  closed by the police. Out of the 76 cases, police have closed 29 cases, despite filing many of them  under the section on abetting suicide. A circular issued on March 3 by B Rajsekhar, chief executive officer of the Society For Eradication of Rural Poverty (SERP), a wing of the State Rural Development Department, which focuses mainly on the improvement of livelihood of the rural poor,  points out that in many cases no proper investigation is taking place and chargesheets against the MFIs are yet to be filed. 

As many as 76 suicides, allegedly due to debt recovery-related harassment were reported that year in the state described as the microfinance capital of the country where one fourth of all the MFIs in the country are concentrated. Police cases were registered, many of them under the section 306 of the Indian Penal Code for abetment of suicide. It was pointed out that since the loans were insured, many of the victims were driven to suicide.

Now, one-and-a half years later, at least one third of the registered cases have been  closed by the police. Out of the 76 cases, police have closed 29 cases, despite filing many of them  under the section on abetting suicide. A circular issued on March 3 by B Rajsekhar, chief executive officer of the Society For Eradication of Rural Poverty (SERP), a wing of the State Rural Development Department, which focuses mainly on the improvement of livelihood of the rural poor,  points out that in many cases no proper investigation is taking place and chargesheets against the MFIs are yet to be filed.

At the time these cases were reported, the mainstream media, national as well as international, took a serious note of the issue. Everything related to the microfinance sector was analysed threadbare: how they targeted women’s self-help groups; their exorbitant interest rates ranging from 25-60 per cent; their coercive recovery methods; and finally, how the industry ended up in crisis because of the loss of the very lives it was supposed to uplift (see 'Profit from the poor').

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