Harassment by microfinance firms: Karnataka mulls ₹5 lakh compensation to kin of victims

Stating that the suicides related to harassment from the microfinance companies in Karnataka were showing a declining trend after the legislation came into effect, Chief Minister Siddaramaiah on Thursday announced that the State government is considering providing ₹5 lakh compensation to the families of those who commit suicide due to harassment.

The Chief Minister’s statement in the Legislative Council came during the reply to a question from the Janata Dal (Secular) member C.N. Manje Gowda. He said, “We aim to bring the suicides to zero. We are currently offering a compensation of ₹5 lakh to the families of farmers who commit suicide. On similar lines, we will try to provide compensation to the families of those who commit suicide due to harassment from micro finance companies.”

Number of cases

Providing statistics on the micro finance related cases and suicides, Mr. Siddarmaiah said that six harassment cases were reported in 2023 when eight persons committed suicide, while 27 cases were reported in 2024 when six persons committed suicide. In 2025, he said that 105 cases were reported and 24 persons had committed suicide.

Cases since February

However, he pointed out, since the Karnataka Micro Loan and Small Loan (Prevention of Coercive Actions) Act, 2025, came into force in February, the cases has been showing a decline.

In February, 44 cases and 10 suicides were reported; it has started showing a decline with 22 cases and 6 suicides in March, 10 cases and 2 suicides in April, 2 cases and zero deaths in May, and 1 case and 1 suicide in June.