Crackdown on abusive microfinance practices: Victims report threats and exploitation

Palamu: In a significant move against microfinance companies engaging in predatory practices, a series of complaints have been filed against Kota Finance and other firms in Chhatarpur of Palamu district. The victims, including Manju Devi, Rajpatiya Devi, and Kunti Devi from village Tenudih, have approached the Chhatarpur police station, detailing instances of harassment and violence by employees of these microfinance companies.

The women allege that they have been subjected to verbal abuse and physical assault by company representatives. In cases of delayed loan repayments, employees reportedly confiscate jewelry and household items. Rajpatiya Devi, in her filed FIR, specifically mentioned Pankaj Kumar from Sukanya Finance Company and accused him of forcibly taking gold jewelry as a penalty for non-payment of installments.

Similarly, Kota Finance employees are alleged to have seized a bicycle from a residence, issuing threats of harm and even suggesting self-harm if the next installment is not paid. The victims claim they were told that the company would recover the outstanding amount from the insurance company in the event of non-payment.
Kunti Devi, in her statement, reported that Anish Raj from Fusion Micro Finance took away household items, including an LPG cylinder, stove, and mixer received under the Ujjwala scheme. Other microfinance companies, such as Utkarsh Finance and Swatantra Finance, were accused of confiscating furniture, jewelry, and appliances.
Shockingly, the manager of RBL Finance Company is alleged to have gone to the extent of threatening physical harm and demolition of the victim’s house. These incidents highlight the urgent need for regulatory scrutiny and intervention to curb exploitative practices by microfinance institutions, ensuring the protection and well-being of vulnerable borrowers.