Following a spate of suicides by poor and rural people in Andhra Pradesh allegedly due to pressure from MFIs, SKS Microfinance on Friday said that as many as 17 borrowers from their firm figured in the list, but none of them were loan defaulters.
"Of the total list, 17 people have had loans with SKS. But they have not committed suicides because of defaults. I re-emphasise, in those suicides there were no defaults or loan arrears. There are other complicated issues (for suicides) on case-by-case basis. Even police have cleared that we are not involved in that," Vikram Akula, executive chairman, SKS Microfinance, said.
He was replying to a question on reports of growing suicides due to the alleged harassment by micro finance institutions (MFIs) for loan collections.
As per the data available the interest rate charged by the companies range from 26-60 per cent.
Andhra Pradesh has been witnessing several suicides by rural people in the last 45 days following inability to repay loans taken from microfinance companies and the figure according to official sources, has touched 30.
The situation prompted the state government to come out with an ordinance on Friday to control loan recovery methods and other issues of microfinance lenders.
To a query, Akula said if a borrower dies, the remaining loan amount is waived and whatever has been paid till then, will be returned to the family.
He said if the Reserve Bank of India or the finance ministry asks SKS, the company is willing to reduce another two per cent in interest. According to him the present rate is 26 per cent.
"We are willing to reduce our rate of interest if RBI or Finance Ministry asks us to do so. We reduced rate of interest in the past, voluntarily. We are ready to lend at 24 per cent," Akula said.
When asked about the ordinance, he said, "As an NBFC, SKS is under the purview of RBI and is regulated by it. The state government will have to take up with RBI and finance ministry as far as interest rates are concerned."
Akula said the profitability of the company will be maintained even after the interest drop.
"We also provide other products like insurance, housing loan. Additional revenue generated from them would offset the potential drop in the interest rates," he said.
Image: Vikram Akula
