Vidhi Codex

The Karnataka Micro Loan and Small Loan

The Karnataka Micro Loan and Small Loan

Finance202520 sections

This Karnataka law aims to stop lenders from using harsh methods to recover small loans. It applies to money lenders and microfinance institutions, but excludes banks and large financial companies that are already regulated. Borrowers include individuals and groups like Self Help Groups. The law requires lenders to register and sets strict rules to stop harassment. It specifically protects vulnerable people like farmers, women, and migrant workers from being forced into debt traps or facing violence. This ensures fair lending practices and safe recovery methods for those who need small financial help.

Start reading →Read full ActSections
  1. 0. Preamble
  2. 1. Short title, commencement and application
  3. 2. Definitions
  4. 3. Registration of Micro Finance Institute or Money Lending Agencies or Organizations or Lender
  5. 4. Power to cancel or suspend Registration
  6. 5. Lending Norms
  7. 6. Micro Finance Institutions or Money Lending Agencies or Organizations or Lender not to seek security
  8. 7. Transparency in rates of interest charged by Micro Finance Institutions or Money Lending Agencies or Organizations or Lender
  9. 8. Penalty for coercive actions against Micro Finance Institutions (MFI)
  10. 9. Power to require production of records or documents and power of entry, inspection and seizure
  11. 10. Complaints
  12. 11. Appointment of an Ombudsperson
  13. 12. Grievances redressal forum
  14. 13. Penalty for contravention of section 8 of the Act
  15. 14. Every officer to be public servant
  16. 15. Relief to borrower from coercive action by the unlicensed and unregistered Micro finance institutions or Money Lending Agencies or Organizations or Lender
  17. 16. Power to remove difficulties
  18. 17. Power to give directions
  19. 18. Power to make rules
  20. 19. Repeal and savings

PDF: pending for this language.