Hubballi: Former Karnataka Chief Minister Basavaraj Bommai has expressed grave concern over the increasing exploitation by microfinance institutions in the state, particularly their adverse effects on poor women. Bommai condemned the practices of these institutions, claiming that the situation has reached such extremes that some women are now forced to send their mangalsutras to the Chief Minister as a desperate plea for intervention.
“There is a severe menace of microfinance in Karnataka. It has reached a point where women, especially from poor backgrounds, are taking extreme measures to seek justice. The government must address this growing crisis urgently,” Bommai stated.
Allegations Against Law Enforcement
Bommai also accused the state police of bias in favor of those involved in aggressive loan recovery practices. "The police are siding with the rowdies who are harassing poor women to recover microfinance loans. This is not only unacceptable but also underscores a systemic failure to protect the most vulnerable," he asserted.
In addition, he alleged that corruption has seeped into the police force, particularly in the appointment of senior officers. “The government has appointed senior police officers through corrupt practices, leaving them unable to take a stand against these atrocities,” he claimed.
Calls for Legislative Reform
The former Chief Minister called for stringent legislation to curb the exploitation by microfinance institutions. “A comprehensive law must be enacted to regulate the microfinance sector and protect poor women from these exploitative practices,” Bommai emphasized.
Rising Concerns
Microfinance institutions have come under increasing scrutiny for their allegedly coercive recovery tactics, which many claim target economically disadvantaged borrowers. This growing crisis has sparked a wider debate about the need for stronger regulations to protect borrowers, particularly women, from exploitation.
Bommai’s comments come at a time when the issue is gaining significant attention, with many calling for a comprehensive review of microfinance practices and the introduction of legal safeguards for vulnerable communities across Karnataka.
Tragic Incident Highlights the Crisis
In a tragic incident that underscores the severity of the issue, a woman from Kakati village near Hubballi died by suicide after alleged harassment by microfinance agents for loan repayment. The deceased, identified as 52-year-old Saroja Kirabi, was reportedly coerced into taking out a loan of Rs 2.3 lakh from a microfinance institution through an intermediary, Holeppa Daddi.
According to the complaint filed by Saroja’s son at the Kakati police station, Holeppa Daddi took out the loan in Saroja's name but withheld a portion of the funds, claiming it as a subsidy. He assured her that he would handle the repayment, but stopped paying after a few months. Subsequently, microfinance agents began to harass Saroja for repayment, leading her to take the extreme step of suicide.
Saroja’s son has accused Holeppa Daddi of cheating multiple women through similar tactics involving microfinance loans. Authorities are now investigating the case, as the allegations against Holeppa suggest a larger pattern of fraud and exploitation.
The tragic incident has further fueled calls for urgent reform in the microfinance sector, with many advocating for stronger protections for borrowers to prevent such harrowing cases in the future.
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