SHGs advised ‘Not to avail loans from MFIs’-Trichy Dt.Collector

Trichy: August 15: In the Grama Sabha meeting held at Ayyampalayam of Manachanallur Block of Trichy District, the district collector of Trichy, Mrs.Jayashree Muralidharan advised women Self help group members not to avail any loans from private sources such as Micro Finance Institutions. “Such private organizations are collecting unaffordable and exorbitant rate of interest from Women Self Help groups” added District collector and advised women self help groups to take loans from Banks as per the norms prescribed by Tamilnadu Women Development Corporation. Most private microfinance institutions are exploiting poor women by charging high rates of interest”, Several members of SHGs functioning under the auspicious of SEVAI in Ayyampalayam Panchayat, an approved NGO for SHGs by Government of Tamilnadu participated in the Grama Saba meetings.Mrs.P.Vanitha, the SHG promoter of SEVAI thanked District Collector for releasing Rs.65000 per group as revolving fund for 135 women self help groups Rs.8775000 out of which Rs.2025000 as Government subsidy for SHGs functioning under MATHI.T.Vanitha subsequently spoke after the Grama Shaba to SHG members and said, “microfinance Institutions move more and more into the mainstream of the private banking sector, is some of its original mission getting lost in the shuffle. The microfinance industry, which dates back decades and has historically been made up of not-for-profit organizations, has subsequently seen a flood of new money from the investors and exorbitant rate of interested collected by MFIs. Over a five-year period, microfinance institutions that had become more traditional commercial enterprises saw their number of active borrowers increase by 30% a year on average. But a more troubling factor was the steep drop-off in the percentage of poor women clients in the years following transformation. That is concerning not only because many Micro Finance institutions start out with the goal of serving poor women entrepreneurs. Micro Finance institutions are modern version of moneylenders – moneylenders even worse than the traditional variety because of the sheer scale of profit they earn at the cost of the poor, and their agenda of keeping the poor under control in the name of ‘freeing’ them from poverty.”The SHG Federation members took a pledge that ehey will never take loans from any of the MFIs.-Govin