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The talk of getting the farmers out of money lenders grip is far-fetched and unrealistic. Money lenders are the intergral part of Rural India and the urban areas.They play a vital role and that is why they have survived for centuries despite the adverse shylock image they suffer. It is better to take positive steps and make them friends of the farming community and devise a system to link them to financial institutions through some sort of a franchise system.

Several decades ago, there was a system in vogue called ‘Muccadam Loans’. It was a simple system of refinancing moneylenders (not financing). Let the RBI and Finance MInistry revisit the system and redraw a modern version of Muccadam to create a win-win situation for the lenders and borrowers.

S. Arunajatesan Chennai

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