IN Bihar, the grandparents took the micro finance institution (MFI) loan for the marriage expenses of their granddaughter. They did not have the capacity to repay it. They jumped before a train and died by suicide. In Maharashtra, a mother told her 6-year-old daughter to lock her in a trunk and let her out after the MFI agent has gone. The child went out to play and forgot to unlock the trunk. The mother died due to suffocation. In Haryana, a husband told the MFI agent to take his wife in lieu of the instalment as they could not pay it. In Andhra Pradesh and Tamil Nadu, women were forced into prostitution to repay their loans. In Assam, a woman was lured by the MFI with dreams of a luxurious life and trapped her into taking a loan for buying a colour television. She died by suicide as she was unable to repay the loan.

In Odisha, the tribals call the MFI loan as ‘Bahu Bandhak (Mortgage) Loan’. A daughter-in-law from Odisha who took a loan had to leave the house and go into hiding. She comes home only in the darkness of the night to meet her children. In Telangana, a woman tailor had outstanding loans from five MFIs. When she was working late one night, the MFI agent entered her premises to collect the instalment and waited till 11 pm in the night. She was found hanging the next morning. Rajkumari (name changed) from Uttar Pradesh said, ‘They came at 12 in the night and said that if you can’t return the money give us your daughter’. Mumtaz (name changed) from Karnataka spoke fearfully of her daughter being kept as a hostage if she does not pay the loan. Women in many villages in the country have fled their homes to escape from the harassment and humiliation by MFI agents. The intensity of economic exploitation and physical abuse is unimaginable.

These and innumerable other horrifying details have emerged in the massive survey on indebtedness recently carried out by the All India Democratic Women’s Association (AIDWA) in about 100 districts in 21 states. The 9,000 women surveyed belonged to agricultural labourers, MNREGA workers, poor peasants, domestic workers, migrant workers, scheme workers, fisher women, SCs/STs, minorities, dalits, adivasis and ‘bought’ wives categories.

In 2020-21, AIDWA noticed that women were in distress about their growing indebtedness. They were getting crushed under the mounting burden of debts. The Covid pandemic and the disastrous failure of the BJP-RSS government to provide relief to the families of the marginalised sections pushed poor women into the clutches of the micro finance institutions.

MFIs ENSNARING WOMEN

The MFI employees are experts in finding ways of luring and exploiting women. Women take these ‘easy, mortgage free’ consumption loans from these non-banking financial companies (NBFC)s as they do not require many documents and they provide the loan at their place of residence. They do not let the women know the exact interest they are charging. Instead, they ask, ‘In how many instalments will you repay?’ After bargaining on this, the number and the amount to be paid in each instalment is fixed. This amount stays the same throughout the repayment period.

Women take these loans for fulfilling their basic needs like illness, food, house repairs, children’s education, marriage, etc. Women have also incurred debts to repay their husbands’ loans. The woman in a peasant family is asked to borrow money for cultivation or for buying a tractor. When the men are unable to repay from agriculture, the women then enter low paid employment and increase their hours of labour to repay the loans.  It is mostly the poor women who take loans from the MFIs. They have no land or access to water, and some do not even have a ration card. Most of those surveyed do not benefit from any government scheme like the PM Awas Yojana, Ayushman Bharat, etc.

Women do not spend anything on themselves like buying a new saree. They take these loans for the family’s needs but are unable to repay them. The MFI takes a copy of the ration card, pan card, aadhaar card and checks the cibil score of the woman. Sometimes the original cards are kept by the agents.

These women also do not get regular work and don’t have the earnings to return the loans. Mechanisation has led to loss of work for agricultural labourers, majority of whom are women. Less than 15 days of work is available under MNREGA. Many of them do not even have MGNREGA or other cards. Some of them have taken 3-4 loans while others have up to 10. Monthly instalments go as high as Rs 40,000 a month. Given their very low incomes, it is impossible for them to pay these high amounts every month. That is when they again approach another MFI to pay the previous instalment. For a loan of Rs 50,000, the women receive Rs 45,000, Rs 5,000 is deducted by the agent, while they pay back up to Rs 80,000. Once they are stuck in the debt trap there is little way out. This vicious circle continues till the woman cannot bear it any more.

Each MFI has different dates on which the women have to pay their monthly instalments.  Initially when giving the loan, an amount is deducted for insurance, irrespective of whether the women want it. Also, the women are compelled to purchase goods, like bulbs for  Rs 1,000.

At the time of repayment, the MFI collectors sit outside the house of the woman till they pay the instalment. They even search, follow and harass them. The collectors smirkingly tell them that ‘marna hain toh maro, lekin loan chukake maro’ (die if you want, but do so after paying the loan). They use filthy language for the woman and the daughter. In some places, if the women are late even by one hour at the time of payment, the amount is doubled. Sometimes the agents take away some of their household goods like television, utensils, etc.

The desperation that poverty brings is such that women feel lucky to have these MFIs to provide them some loan. When asked why they take loans from such rapacious MFIs, women say, “Will you give us money? What alternative do we have? Banks ask us for papers, IDs and other documents. Banks do not give us loans”. Their survival depends on these consumption loans. The lenders go to the house and give loans which can be paid on a weekly, fortnightly or monthly basis. In order to return one loan, they have taken up to 5 loans. In some places they curse having ever got into this system.

Significantly, no harassment was reported from Kerala. Women have taken loans from co-operatives and nationalised banks for marriages. The presence of Kudumbashree and other institutions provides them with alternatives.

MICRO CREDIT – NEW FORM OF PROFIT GENERATION FOR CORPORATES

After nationalisation of banks in 1969, many branches were opened in the rural areas of the country. Farmers, dalits, adivasis, marginalised sections could avail of the priority loans and it helped them in getting out of the trap of blood-sucking private money lenders. During the liberalisation period in the 1990s, the entire credit policy was weighted in favour of corporates, and against the working people. Foreign banks were allowed to open their branches in India with the argument that it will encourage competition. Competition means profit-making. As a result, loans to the rural sector and the poor shrunk and the corporate sector benefited hugely. Privatisation of banks and reduction of rural branches was encouraged. Corporates started getting even agricultural loans. Banks withdrew from giving priority loans to the rural and urban poor. People in rural areas were again compelled to approach the sahukars and money lenders when in need of money.

The concept of micro credit took birth in the late 1990s. Two types of micro credit systems started in the country. One, SHG-bank linkage programme. Two, sensing profits, private MFIs descended like vultures on the poor. The rich started investing in MFIs which lent this money at high interest rates to women. The returns on these investments more than doubled enhancing the wealth of the rich. The labour and sweat of poor women converted into profits for the rich investors. For example, Catamaran, a company floated by Narayan Murthy, invested Rs 30 crore in an MFI called SKS in Karnataka, and reaped a profit of Rs 60 crore in six months. MFIs became a model for giving loans to and earning super-profits from the poor. The usurious interest rates ranged from 26 to 120 per cent.

Maximisation of profits became the aim. Higher returns to the investors in MFIs justified the loot of poor women. Micro credit has become an instrument of exploitation by the corporates. Earlier the interest rate was capped at 26 per cent. MFIs opposed this. So, the cap on the interest rate was removed. The priority lending sector is squeezed and corporates given bonanzas of write-offs of loans and reduced taxes. Micro credit has been a windfall for the corporate investors in MFIs.

The RSS had opposed the nationalisation of banks in 1969. And now being in power, the BJP-RSS is pushing ahead with their agenda of privatisation of banks. This will strengthen the stranglehold of the MFIs over poor families in the country, especially in the rural areas. The government refuses to address the root cause of this desperate situation which is unemployment. Generation of livelihood opportunities is the need of the hour.

The women are keen that MFIs be closed down and government banks give loans at low interest. Due to interventions by AIDWA, authorities were compelled to reduce interest rates in some districts in West Bengal. Tamil Nadu took up cases of harassment of women with the RBI ombudsman and got an order directing regulation of MFIs. Regional rallies have been held. The tehsildars had to intervene in cases of harassment in Maharashtra. Protests have been held in Karnataka, Bihar and other states.

AIDWA will hold a national public hearing in the capital Delhi in the next few months, which will thoroughly expose this new network of exploitation and loot of the poorest sections of women. The report of the nationwide survey on women’s indebtedness that has been conducted by AIDWA will be released there. This public hearing will also give a call for a nationwide campaign and mass struggles on this vital and burning issue facing women in India.