The Andhra Pradesh High Court on Monday dismissed a writ petition challenging the Andhra Pradesh Microfinance Act, 2010.
The Act, which had brought in many restrictions on MFIs to protect the interests of the poor, was widely criticised by the industry and challenged by the only listed MFI in the country, SKS Microfinance Ltd.
The State Government had brought out an ordinance in October 2010 after a row over the alleged harassment of clients by recovery agents of MFIs leading to their suicides.
“Basically, I understand that the challenge to the Act has been dismissed by the High Court. The Government has also been told to take certain things into consideration as a Bill by the Government of India
on the issue is underway. We are looking into the judgement details,” Reddy Subrahamanyam, State Principal Secretary, Rural Development, told Business Line.
A spokesperson for SKS Microfinance said they needed to look into the judgement in detail before responding.
The judgement is a setback to the MFIs as they are hoping for normalisation of business in Andhra Pradesh in order to disburse fresh loans and collect over Rs 6,000 crore in dues.