Some 200 borrowers ended their lives in Andhra Pradesh due to alleged harassment.

The investigation into the alleged suicides of borrowers from microfinance institutions in Andhra Pradesh is set to speed up.

The Government is forming special teams to collect statements from the affected families/clients of MFIs to aid the police to complete the ongoing investigation speedily, Mr Reddy Subrahmanyam, Principal Secretary, Department of Rural Development, Andhra Pradesh Government, told Business Line here on Thursday.

About 200 suicides by borrowers were reported in 2010 in Andhra Pradesh, the leading market for microfinance companies in the country, due to alleged harassment of clients by recovery agents of many MFIs, including SKS Microfinance, according to State Government data.

Of these, about 100 cases were registered by the police, but investigation into which are yet to be completed.

The Government is also thinking of reopening some cases which were not ‘properly' investigated and fix responsibility.

Investigation exercise

“The Additional Director-General of Police has assured us to complete entire investigation before April 30,” the official said.

The teams will also have representatives of non-Government organisations and lawyers as their members.

They would make house-to-house visits to talk and record the statement of the victims on the alleged harassment.

The Government suspects that most of the cases were being closed at the primary investigation stage itself and wanted to monitor the investigation tightly.

Based on the department investigation which confirmed that the MFI agents drove some clients to suicides, the AP Microfinance (Regulation of Money lending) Act was enacted in October 2010.

As the legislation banned multiple lending and regulated collection practices, the microfinance business came to a virtual standstill in the State resulting in losses to MFIs.

(This article was published on March 1, 2012)
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