Microfinance companies harass women who were unable to repay their loans due to lack of income during the COVID-19 lockdown, according to an investigation by the All India Democratic Women’s Association.
Speaking to reporters here on Sunday, its Secretary of State SK Ponnuthai said the association surveyed 1,387 women in 30 districts two months ago. Among those interviewed, 192 women were from Madurai city and 51 women from rural areas.
They revealed that they had to borrow from microfinance companies, government banks and even pawn shops to pay the rent on the house and cover health, wedding, burial and education expenses and repay interest on loans already obtained. “In some cases, women had pledged their land documents, ration cards, Aadhaar cards and jewelry to cover their family’s expenses during the lockdown, while many families lost their regular income,” he said. she declared.
When they were unable to repay loans with interest rates ranging from 5% to 27%, representatives of microfinance companies abused them in obscene language. âSome of them revealed that they even tried to end their own life,â Ms. Ponnuthai said.
Their representatives used to visit borrowers’ homes as early as 6 a.m. and also at odd times like 11 p.m. They used to wait long hours in front of their houses to pressure the women to repay the loan installments.
The survey found that women borrowed more money after the COVID-19 pandemic.
The Madras High Court had ordered microfinance companies not to use force when collecting contributions from loans during the lockdown and, as a result, the Reserve Bank of India announced a six-month moratorium on borrowers repay the loans. However, the behavior of representatives of microfinance companies has never changed. âThey were targeting single women, widows and families headed by women,â she said.
The association called on the state government to end these illegal tactics by microfinance companies and to make efforts to forgo interest on loans people took during the lockdown. They should be given additional time to repay the loans.
The state government should provide financial assistance for women to start businesses and the loan amount for single women should be cut. Special agents should be appointed in each district to oversee the functioning of microfinance companies and action should be taken against those who used pressure tactics, causing women to attempt to end their lives.
The Center is expected to allocate additional funds under Mahatma Gandhi’s National Rural Employment Guarantee Program to secure jobs for more people and the program is also expected to be extended to urban areas. The state government is expected to provide 7,500 yen of COVID-19 assistance monthly for at least six months, she said. The district secretaries of the association R. Sasikala and C. Muthurani were present.