Karnataka’s new Ordinance and the state of microfinance sector

Karnataka’s new Ordinance and the state of microfinance sector

On February 12, 2025 after days of deliberations, the Karnataka government promulgated an Ordinance to crack the whip on unregistered and unlicensed microfinance institutions (MFI) and moneylending agencies in the State.
| Video Credit:
The Hindu

On February 12, 2025 after days of deliberations, the Karnataka government promulgated an Ordinance to crack the whip on unregistered and unlicensed microfinance institutions (MFI) and moneylending agencies in the State. The new legislation aims to protect economically vulnerable groups and individuals from exorbitant interest rates and coercive means of loan recovery.

Why did such an Ordinance become necessary? What are its key features? What are the concerns raised by microfinance institutions?

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Reporting: Nalme Nachiyar, Sharath Srivatsa

Video & Editing: Ravichandran N