Microfinance scams rampant in Uttara Kannada dist; 7 cases registered

Karwar: The scourge of microfinance scams has escalated in Uttara Kannada district, with reports emerging from Halial, Mundgod, and Yellapur of individuals being trapped under exorbitant interest rates. Some victims have found themselves facing interest rates as high as 30%, and many have reached a point where they feel compelled to leave their homes due to the unbearable financial strain.

Recognizing the gravity of the microfinance issue, the state government has initiated the ordinance to combat this growing menace. In Uttara Kannada, certain finance companies are reportedly disbursing loans of ₹20,000 to ₹30,000 while obtaining signatures on blank cheques, which they subsequently use as leverage to extract money from borrowers. These companies have been threatening legal action against borrowers, using the blank cheques to file cases in court. One distressing case is that of Hasina Sheikh from Dandeli, who took a loan from a finance company and was subjected to illegal interest charges. When the lender demanded even more money, Hasina felt forced to leave her village. In a video pleading for help, she has reached out to government officials, imploring them for assistance in her plight. There are serious allegations that microfinance and “meter interest” scams are operating openly in regions like Halial, Dandeli, and Joyida. Locals describe the perpetrators, often referred to as “rowdies” on the MOB list, as the kingpins behind these illegal operations, targeting vulnerable individuals for loan and interest collections. Reports indicate that these loan sharks are brazenly entering homes day and night to recover debts, forcing many borrowers to abandon their residences. Yoga Raj, a local activist, stated, “In areas where once people struggled to find meals, they are now resorting to these predatory loans, becoming ensnared in a cycle of debt that feeds on the poor. They are filing cases over bounced cheques in court to recover money, charging interest rates from 20% to 40%. Despite complaints being lodged, no action has been taken. It’s high time the authorities wake up to this issue and conduct a thorough investigation.”

To date, seven separate cases related to microfinance and meter loan scams have been documented in the district. Many have fallen victim to these schemes but are reluctant to file complaints due to fear of retaliation from the criminals involved. Some individuals have provided tip-offs about these illegal operations confidentially. Based on such information, police have conducted raids, including one on a residence in Mundgod belonging to a man named Navle, where over 250 blank cheques were recovered.

District residents are enduring significant hardship due to the microfinance scams, with monthly interest rates of up to 30% making it increasingly difficult for them to make ends meet. The police are treating the situation with utmost seriousness. M. Narayana, the District Police Superintendent, has urged anyone facing harassment due to microfinance or meter loans to report their complaints by calling the confidential number 9480805201 or visiting the SP office to provide information discreetly. The growing crisis in Uttara Kannada highlights the urgent need for regulatory measures and strict oversight of microfinance companies to protect vulnerable populations from exploitation. The community’s resilience in speaking out against these injustices may be the key to combating this pervasive issue.