Micro-finance companies, taking advantage of the demonetisation of high value currency, are slowly re-entering Sircilla textile town in AP and lending small loans to power loom weavers. Demonetisation has cast its shadow on the powerloom industry which is already reeling under crisis due to no-takers for its grey fabric.

Two micro-finance companies started providing loans ranging from Rs 2,000 to Rs 5,000 after collecting bonds and sureties. They collect a whopping interest rate of 36 per cent and burden the weavers. Usually, months of November and December are lean seasons for the movement of fabric. Demonetisation has come as a rude shock to main purchasers of the fabric - traders, powerloom owners and power loom workers. As fabric production and sales are done only through cash, the ban and restrictions on withdrawal of cash from banks has become a cause of concern for everyone involved in the industry.

People in Sircilla still remember the harassment by micro-financers who operated till 2008. There were incidents of weavers resorting to suicide unable to bear the mental agony and torture by agents of micro-finance companies.

The then chief minister of united Andhra Pradesh removed micro-finance companies by making nationalised banks provide loans to weavers.