Microfinance Institutions in Orissa to focus on Transparent Pricing

Microfinance Focus, Oct 28, 2010: In an attempt to prevent an Andhra like crisis from occurring in Orissa, the Indian microfinance industry association, Sa-Dhan held a chapter meeting in Orrisa on Wednesday. The meeting was attended by more than 20 microfinance institutions operating in the state.

As told to microfinance Focus, during the meeting it was decided by the participating MFIs that they will all follow a transparent pricing strategy and will declare their rate of interests. It was also decided that members will adhere to the ‘Code of Conduct’ issued by Sa-Dhan to ensure that MFIs don’t indulge into damaging practices.

Further, the members will come together to form a committee which will be responsible for coordinating with various stakeholders of microfinance industry like government, media and banks.

The Andhra Pradesh Government issued an Ordinance on 15^th of October for regulating the microfinance institutions operating in the state. The ordinance came after a spate of suicide cases by microfinance borrowers were reported in the state. It was alleged that coercive practices of microfinance institutions forced these borrowers to commit suicide.

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