Experts of the Movement “Professionalism and Responsibility for the People” (PRO) said the microfinance firms in Moldova are ill-intentioned and the business entities and ordinary people suffer as a result. These apply uncivilized practices that form part of legitimized stealing machinery. Moreover, the activity of the microfinance sector is not monitored by the state institutions responsible for the regulation of the area and these do not take measures to improve the situation.

In a news conference at IPN, the Movement’s leader Gheorghe Costandachi said an analysis carried out by the organization showed the people are cheated. Some have to go abroad to work so as to be able to  repay the loans that ultimately turned out to be at least five times higher than the initially collected amount. During the past eight years, the number of microfinance companies and the volume of released loans rose over four times and the incomes of these firms grew eight times.

According to Gheorghe Costandachi, the contract clauses proposed by microfinance companies are abusive. The interest is exaggerated and there are taxes afferent to the contract, leasing commissions and other payments. The percentage on the microloans raised from microfinance companies reaches over 1,000%. “Any continuation of the situation leads to the liquidation of the small and medium-sized businesses sector, impoverishment of the population and driving of the people away,” he stated.

Comparing the national legislation in the field with the European one, Alexandru Gamanji, expert of the PRO Movement, said he noticed serious drawbacks. Legal provisions are applied formally and the real owners of microfinance companies and the origin of the financial resources are thus not known. In most of the EU member states, they cap the interest rate in this field and such a practice should be implemented in Moldova as well.

Iulian Ucraineț, programs director at the PRO Movement, said cruel, immortal practices and methods are used and these are beyond any Christian principle.

According to the Movement’s experts, the National Commission for Financial Markets should make an analysis and publish the names of companies that apply abusive practices, while the Agency for Consumer Protection and Market Surveillance should make public the rights of borrowers and work out a standard microfinance contract.

The experts called on the people who consider they were misled by a microfinance firm and cannot hire a lawyer to seek help from the PRO Movement where they will be helped free of charge.