The Assam Assembly has passed the Assam Micro Finance Bill on Wednesday. The bill will protect economically vulnerable groups and individuals from the hardship of usurious interest rates and coercive means of recovery by microfinance institutions or money lending agencies.
The Assam Micro Finance Institutions (Regulation of Money Lending) Bill, 2020, proposes "to create an effective mechanism to regulate the micro finance institutions or money lending agencies or organisations".
On December 13, the Assam Cabinet had approved the proposal to reign in the micro finance entities that mostly give loans to women self help groups (SHG) at high rates.
"The proposal to bring in a new Act to control the micro finance units was passed. They have to operate as per Reserve Bank of India"s norms and should not be able to levy any rate on consumers, who are mostly women SHGs from villages," Parliamentary Affairs Minister Chandra Mohan Patowary had said.
With the implementation of the bill, the MFI will not be able to harass the women demanding to reimburse the money. No financial institutions will be able to provide loans without having proper registration.
