In a brave stand against relentless harassment from microfinance companies, women of Haveri district in north Karnataka have launched a campaign entitled ‘Save Mangalya Sara’.(save Mangal chain) This initiative comes as a response to the inhumane treatment meted out to borrowers, particularly women, who have become victims of aggressive loan recovery practices. As part of their plea, the women have taken the remarkable step of personally sending a Mangalya Sara to Chief Minister Siddaramaiah, highlighting their grave concerns and seeking intervention at the highest levels.
Despite recent warnings from Chief Minister Siddaramaiah that stringent measures would be enforced against predatory lending practices, incidents of harassment by microfinance staff continue unabated across the state. The women of Haveri, alongside farmer leaders, felt compelled to take matters into their own hands to shed light on their suffering, which has disrupted their lives and homes.
Microfinance institutions, often targeting economically disadvantaged women, employ aggressive tactics to recover loans. Victims report receiving incessant harassment at their doorsteps, rendering them unable to find peace even in their home sanctuaries. The women of Haveri have expressed desperation, pleading for an end to the harassment that they claim is stripping away their dignity and well-being.
Their resounding voices reached the district administration, imploring the Superintendent of Police and the Deputy Commissioner to take decisive action against microfinance companies. They emphasise that the financial pressure, coupled with social stigma, has not only affected their economic standing but has also taken a severe toll on their mental health.
The situation is alarming and reminiscent of recent incidents in other districts. In Ramanagar, villagers were forced to abandon their homes due to the incessant pursuit of private lenders. A similar plight has unfolded in Kodagu, where families have fled their communities, overwhelmed by the crushing debt and unyielding pressure from financiers.
Chamarajanagar has witnessed a mass exodus, with over 100 families leaving their villages as a direct result of microfinance harassment. Many parents have withdrawn their children from schools, prioritising debt repayment over education, thus jeopardising the future of an entire generation. The rural poor, who sought loans for essential household expenses, often cannot meet repayment deadlines. A mere delay of a day can trigger relentless intimidation from microfinance agents.
A heart-wrenching account from a boy named Mohan from Heggavadipur encapsulates the despair felt by many. He expressed his willingness to sacrifice his health, stating, “I am asking you to permit me to transplant one of my kidneys, sir. We will somehow survive by selling our kidneys to pay off our parents’ debts.” His poignant plea illuminates the dire straits faced by families trapped in a cycle of debt and desperation.
In Ramanagara, the situation is precarious as microfinance institutions prey on vulnerable individuals, providing loans at exorbitant interest rates. By targeting labourers in rural areas, these institutions create a web of dependency that offers little respite for those struggling to make ends meet. The pressure to repay loans on unrealistic timelines is compounded by the threat of harassment, causing immense distress.
The cycle of violence doesn’t just affect adult borrowers; children, too, are caught in this vicious cycle. Debt collectors often resort to harassment that stresses entire families, forcing some to contemplate the unthinkable due to their crippling circumstances. There are even reports of suicides linked to the fear and shame induced by these practices.
The institutions have successfully infiltrated vulnerable communities, including tribal populations, exploiting their lack of knowledge and resources. The rise of high-interest loans has exacerbated financial woes, forcing families to flee their villages in search of solace from the unrelenting pressure to repay debts.
Opposition leader R Ashok urged stringent action to save people
Special reports on the increasing harassment by microfinance companies have been published in many newspapers in the state. Citing this report, Opposition Leader R. Ashok expressed deep concern, stating that thousands of impoverished families across the state are suffering under the oppressive practices of microfinance firms, leading some to abandon their homes and, tragically, take their own lives. He criticised the state government for failing to assist these affected families, accusing it of arrogance and indifference.
“Microfinance institutions are charging annual interest rates of up to 25%, violating RBI regulations. They intimidate, threaten, and harass borrowers to the point where individuals feel compelled to commit suicide or flee their villages,” Ashok stated. He also highlighted the alarming incidents of property seizures in recent times, asserting that those caught in the web of microfinance loans are often left without anyone to turn to for help.
“The majority of people taking loans from microfinance companies are the poor, daily wage earners, street vendors, agricultural workers, and small farmers. Therefore, the state government needs to constitute a joint committee comprising senior officials from the Home, Finance, and Legal Departments. This committee should devise strategies to protect these vulnerable families from microfinance harassment. Additionally, the government should engage with the Central Finance Department and the RBI to seek permanent solutions to curb the exploitation by microfinance companies,” he urged.
Ashok’s comments underscore the urgent need for government intervention to defend the rights and dignity of those affected by predatory lending practices. This issue highlights economically disadvantaged communities’ struggles and calls for immediate legislative and regulatory reforms to safeguard their well-being.
More than 7.8 lakh complaints were filed in the state.
In a disturbing trend, poor and middle-class individuals are facing growing harassment from private finance companies. Simultaneously, millions of rural women who invested their savings in these firms, believing them, have fallen victim to fraud.
Victims who invested under ‘Unregulated Deposit’ schemes offered by private finance companies have filed over 780,000 complaints across various district offices in the state. The complaints include 271,466 from Belagavi, 89,037 from Bagalkote, 75,000 from Vijayapura, and 42,500 from Mandya. These districts have reported the highest number of complaints in the state.
Last year, there was an influx of applications from women to the ‘Complaint Acceptance Centers’ opened in various district offices as victims awaited government assistance.
The government has appointed a separate ‘Empowered Authority’ to investigate 127 companies under the Karnataka Protection of Depositors in Financial Institutions Act, 2004 (KPID Act) and the Prohibition of Unregulated Deposit Schemes Act, 2019 (BADS Act), but no severe steps taken against the companies.
“Proposals for the appointment of authorities concerning some companies have not been accepted. Complaint applications against such companies should be forwarded to the District Police Superintendents for investigation and reporting,” the Principal Secretary of the Revenue Department has instructed district commissioners.
“Private finance agents, exhibiting exorbitant interest rates, are fleeing overnight after taking money from women. Some women have committed suicide. The government must take strict action against private finance companies,” urged Ramalingappa, a farmer leader in Mandya District.
The process of categorising the complaints filed in the district and forwarding them to the respective empowered authorities is currently underway, stated Dr Kumar, the Deputy Commissioner of Mandya.
Rajamma, a women’s organisation, called for the government to seize the assets of the guilty companies and take immediate action to provide relief to the victims.
Districts with the Highest Number of Complaints:
This situation highlights the urgent need for regulatory measures to protect vulnerable individuals from the exploitative practices of private finance companies.
The state congress government led by CM Siddaramaiah is not interested in saving people but indulges in making tactics to save power from rivals inside the parties.
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