It is a bottomless pit, where desperate souls take the plunge because of There Is No Alternative (TINA) factor. It may appear okay for a few months but soon the decision to borrow money on kandhu vatti from a private lender boomerangs with some even taking the fatal leap. Express takes a look at money lending where everything from meter to monthly vatti is custom made to attract the proverbial sacrificial lamb.
However, caught in a financial jam, she wanted quick money, which was possible only outside the banking credit system. She thought she could come out of it unscathed, so she sought out a moneylender who offered cash at kandhu vatti (usury). That perhaps was the worst decision actor Sindhu Menon made in her life, something that forced her to attempt suicide.
“I knew it was kandhu vatti and that I would have to pay a huge interest. But since the film shooting was stuck due to lack of funds, I took the loan,” said Sindhu, when she recently visited the Chennai City Police Commissionerate to lodge a complaint against the coercive moneylender.
“This is how it always happens. People taking the loan are always aware of the conditionalities set by the lender. Things get difficult when they fail to repay the interest and the lender often employs criminal means to retrieve the amount,” says an officer with the Central Crime Branch of the city police.
Sindhu can consider herself lucky as her case drew media attention and put the spotlight on the Shylocks on the prowl.
Among the latest to join the unlucky list was Veerapan, a businessman running a electric circuit making unit at Guindy, who was allegedly beaten up with an iron rod by men engaged by his lender, killing him on the spot on August 31.
According to his relatives, Veerappan had taken Rs 5 lakh as loan. “He ended up paying up to Rs 50 lakh in hope that the lender would give back documents of a property worth Rs 80 lakh he had mortgaged. The lender’s goons would often enter our house when women were alone. On one occasion, they put a knife to the throat of one of us. Police complaint was of no use,” says Lakshmi Narayanan, a relative of Veerapan.
In most cases, kandhu vatti lenders are smalltime persons eager to grow their money plant. Often four to five persons come together and pool in money. The returns are equally shared. “In some cases, the actual money owners never come into the picture. They engage a middleman, who is often somebody with political collections, to bargain with debtors and milk as much interest as possible,” says the police officer.
While kandhu vatti is the generic name for usury, it has various manifestations. “If its meter vatti, it has a 12-hour cycle. You have to repay the loan taken in the morning plus interest by evening. For example, if you borrow Rs 1,000 in the morning, in the evening you need to pay back Rs 1,200,” says Ravi Kumar, a vegetable vendor at Koyambedu.
In other words, the lender’s money would double in five days flat.
The money plant grows faster if cash is loaned on an “hourly vatti”, which is generally sought by gamblers playing cards. As the name suggests, interest rate goes up with each passing hour. If the gambler manages to win, he can easily pay back; else the interest gets doubled every hour till he pays up. He could end up paying a lot.
In the olden days, the Muslims from the plains who ventured into the hill areas of Tamil Nadu were synonymous with usurious lending.
In the cities and towns, ‘seths’ - the North Indian pawnbrokers - have now occupied space with the overt or covert support of the people in khaki.
It’s high time we built robust micro finance facilities to offer institutional credit to people in distress. That coupled with strict enforcement of the law would keep Shylocks at bay.
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