Karnataka Chief Minister Siddaramaiah declared on Wednesday that the state government will soon implement an ordinance aimed at curbing harassment by microfinance companies. The ordinance, which has already been approved by the Governor, seeks to protect borrowers from unfair debt collection practices and abuse by microfinance institutions.
In a post on X, Siddaramaiah assured the public, saying, “An ordinance designed to prevent harassment of borrowers by microfinance companies under the pretext of debt collection has received the Governor’s signature. This law will come into effect soon, ensuring protection against illegal loan collection and harassment. Don’t let anyone make hasty decisions out of fear of harassment from microfinance. Our government stands with you.”
The ordinance comes in response to widespread complaints about microfinance institutions exploiting vulnerable individuals, especially those from lower-income groups, to recover loans. The state government has vowed to take strong action to prevent such exploitation, with Deputy Chief Minister DK Shivakumar emphasizing that the authorities will not allow microfinance companies to intimidate the poor.
Shivakumar also noted that several FIRs had already been filed against microfinance companies in areas like Belagavi, Bidar, Mysuru, and Ramanagara, following reports of harassment. He assured the public that the government was taking stringent measures, including empowering the police to address these issues more effectively.
The Chief Minister’s office confirmed that the ordinance had already received approval from the Governor and would soon become law. Additionally, helplines have been established in district headquarters to support those affected by the actions of microfinance companies.
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