Debt swapping under study: Vatti

Rural Development Minister Vatti Vasanth Kumar on Thursday revealed that the debt swapping method and the ‘Pavala Vaddi’ scheme is under study by the State-Level Bankers' Committee to mitigate the sufferings of the poor borrowers of MFIs.

Talking to media persons at the Secretariat, Mr Vasanth Kumar stated that the government has been waiting for a reply from the Bankers on the issue.

Mr Vasantha Kumar also made it clear that the state government has no jurisdiction over the interest rate levied by the MFIs on their borrowers.

The Minister also categorically stated that the loanees in the villages were misusing the loans by using these for their personal expenses.

Mr Vasantha Kumar pointed out that though the credit facilities should be directed towards investment to better economic status, beneficiaries were spending the loans for personal gratification. He revealed that when he spoke to a beneficiary recently, she said that she had spent the loan for travelling to Tirumala.

The Minister pointed out that the government was first to react when the DWACRA groups or SHG members were being harassed by MFIs in the rural areas.

He accused Opposition Leader and former chief minister N Chandrababu Naidu of shedding crocodile tears. Mr Vasantha Kumar added that the Telugu Desam Party president was instigating the borrowers not to repay the loans.

The Minister further accused Mr Naidu of trying to create anarchy. Reading from the book 'Manasulo Maata' penned by Mr Naidu, the Minister said that the TDP chief spoke against micro credit out of mere frustration.

Mr Vasantha Kumar added that he was ready for a discussion microfinance with the former chief minister publicly in the presence of borrowers.

Reacting to a question, the Minister clarified that whatever Congress promised before 2004 elections, the government had fulfilled, including free power, while the TDP did not.

He was immediately corrected by a scribe that the TDP had not returned to power to fulfil the promises made in the party manifesto.