The micro-finance bodies have of late been reporting wrongdoings. They have charged exorbitant interest from self-help groups and other less organised groups of loanees.
In some cases, they have charged as high as 50 percent interest on loans literally behaving as loan-sharks.
The revelation has come as a shock and the authorities have begun checking the activities of the micro-finance institutions closely.
Especially Tamil Nadu has witnessed a high incidence of the MFI related illegal actions.
The authorities are asking the self-help groups to seek loans from the cooperative and nationalized banks so they could escape the clutches of the dishonest micro-finance bodies.
The wrongdoings of the MFI have become an issue that needs to be fixed soon. The central govt. is already mulling over a suitable law to tackle the problem.
