Microfinance

SKS Microfinance Offices under attack !

Sensing an opportunity for political mobilization over the recent suicides of MFI clients, the parliamentary left parties have issued instructions to their cadre to instigate MFI clients and target Microfinance companies in Andhra Pradesh.

Yesterday  various offices of India’s largest microfinance institution SKS Microfinance were ransacked in Andhra Pradesh. The offices which came under attack were in Khammam, Ranga Reddy and Vizag districts of Andhra Pradesh. Mobs led by political activists laid siege to the offices demanding that the records of borrowers and loan disbursements be made available for verification.

SKS Microfinance Office

Political Activists vandalize SKS Microfinance's Office. Image-credit:hindu.com

Some activists of the CPI(Marxist) attacked the Munugur branch of SKS Microfinance in Khammam district, while activists of the All India Student’s Federation (AISF) – the youth wing of the Communist Party of India ransacked the company’s office in Ibrahimpatnam in Ranga Reddy district.

In both these places, the offices suffered from heavy damage and broken furniture and computers could be found littered all around. In the Vizag area, offices of SKS Microfinance in three different locations were targeted by unidentified people. These unidentified political activists came to SKS offices and threatened to break the computers if the staff did not hand over records of borrowers immediately. The staff then handed them printouts of some of the members who had taken loans.

Some people believe that activists of CPI and CPI(M) are looking to find out the names of those clients who have taken loans from SKS Microfinance in these districts so that they could then instigate these people to not repay the loans that they have taken from MFI’s .

Terming the attacks as “illegal”, a spokesperson for SKS Microfinance said to the Economic Times : ” We have always believed that there is a right way to practice microfinance and we have followed that path for the last 13 years. We welcome any steps that will prevent unethical practices in the microfinance sector.”

So far more than 20 persons including 11 women have been arrested and remanded to judicial custody for vandalizing SKS Microfinance’s offices.

SKS Microfinance being the biggest and most visible microfinance institution has so far borne the brunt of the attacks from Left Activists. Some analysts believe the crisis in Andhra has only began and the next fews days will be crucial and the whole sector is watching to see if the political movement will spread to other districts and whether it would affect other MFI’s too.

The current crisis in Andhra Pradesh began after the media began highlighting the  increasing number of suicides by MFI clients and the kidnapping of a minor child by the agents of a MFI.

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