(Image source from: Microfinance Vanishing From AP?)

AP does not want what United Nations, World Bank, IFC, Swiss and even Government of India wants, exclaims Vijay Mahajan, Founder Chairman of Basix Microfinance.  Basicx is working in nine countries.

He says “It’s ironic that we are unwanted in Andhra Pradesh but welcomed all the way from Asia Pacific to sub-Saharan Africa. Basix is working with nine countries around the world starting from Papua New Guinea to East Timor on eastern side to Cameroon, Mozambique, Tanzania and Ethiopia in Africa”.

APMFI Act 2011 crippled Microfinance in AP as the act is stringent in dealing with the high interest rates, coercive collection methods and illegal insurance practices that became heavy on the borrowers.  As a result the microfinance companies sustained a loss of Rs.6500 crores and staff over 30000 was reduced in those companies.  

Microfinance companies operating in AP wants the act to be repealed so that they can operate in the state.  SKS the only listed MFI having head office in AP has now changed it to Mumbai.  Basix, Spandana, Share and Asmitha are also moving their operations to other states.  

The MFIs say that the APMFI Act is very complicated and so burdensome that it is not possible to operate under the Act.

-SriJa