Loan sharks on the prowl
As many as 20 people have died by suicide in the state so far because of rising debts after losing work and business to the lockdown imposed in the wake of the second wave of Covid.
Published: 05th August 2021 06:43 AM | Last Updated: 05th August 2021 06:43 AM | A+A A-
KOCHI: Around 20 people have died by suicide due to mounting financial crisis and debt during the lockdown. Many of them fell prey to the harassment of local blade mafia. Though the government has given moratoriums on loan taken from banks, people who have borrowed from local money lenders are the ones struggling
As many as 20 people have died by suicide in the state so far because of rising debts after losing work and business to the lockdown imposed in the wake of the second wave of Covid. Many victims had taken loans from illegal money lenders who then forced them to either pay the exorbitant interest or repay the principal amount with compound interest.
The much-hyped ‘Operation Kubera’ initiated by the state police earlier to curb the menace of ‘blade mafia’ appears to have got nowhere. The money lenders are on a loan-disbursing spree and proceed to threaten people with dire consequences to get the money back, taking advantage of the lockdown woes. Meanwhile, the police are “busy” enforcing lockdown restrictions by imposing penalties on people who want to work to meet their daily needs.
While the government could offer moratoriums to those who take loans from major banks, those who borrowed money from local money lenders are at the receiving end. The twin brothers who died by suicide in Kottayam on Monday had also fallen prey to loan sharks. Local residents pointed out the local bank staff had threatened them regularly and that pressure led them to resort to the extreme step.Suresh Kumar, a 46-year-old scrap dealer in Neyyattinkara, is a survivor of the cruelty meted out to him by money lenders.
“I was in urgent need of money to complete the work on my house last year. So I borrowed `2 lakh from a local money lender. Suddenly, the lockdown was imposed and all work stopped mid-way. I couldn’t pay the monthly interest. The lender kept threatening me. Though I have requested him to give me an interest concession due to the lockdown, he never agreed. Later, I had to sell 10 cents of my ancestral property to repay the money at double the interest rate,” Suresh said.
His is not an isolated case. Many people are on the verge of suicide. Such money lenders are operating at local markets to lure daily wage labourers and traders including fisherfolk. In Neyyattinkara alone, more than 100 money lenders are operating at markets and autorickshaw and taxi stands.Though there are no suicides reported from the Ernakulam district, most of the local traders are struggling. Kerala Merchants Chamber of Commerce general secretary K M Vipin said in the city alone, 112 shops were shut down since the lockdown started.
“More than 40 houses of the merchants/businessmen faced dispossession since they were unable to pay off the loans. The people who suffered more were from the textile, gold, and footwear industries. The textiles lost all the seasonal sales for the past one and a half years. Onam, Vishu, Christman, and Ramadan were some of the best selling seasons for textiles,” Vipin said.
Under the aegis of the association, they are arranging interest-free loans to the tune of `1 lakh for the members, from their common fund. This loan has to be repaid in a year. The Shop Owners’ Association has also reduced rent for one month to support the businesses. However, they alleged that there was no support from the government.
‘Loan apps’ laying traps Exploiting the lockdown situation, ‘loan apps’ are also targeting those short on finances. Mostly, people from middle and upper-middle-class families fall prey to the digital sharks.Many unregulated loan apps are mushrooming in the country harassing and looting people by charging sky-high interest rates. Last year, many dubious loan apps lured vulnerable people, leading to some of them even ending their lives due to the harassment caused to them and their family members.
If the loanee is unable to repay the amount, the lenders would start calling their family members and friends. That creates mental trauma pushing people to suicide.The average loan amount offered ranges from `5,000 to `50,000 and is offered for a tenure of three to 15 days at an interest rate of 60 to 100 per cent. A lengthy documentation process is not involved and the lender simply requires the borrower to submit a copy of his photograph, Aadhaar card and PAN card. Income and standard verification checks are also not conducted and hence people fall into their trap easily.According to DIG (south zone) K Sanjay Kumar Gurudin, any person who lends money outside the legal mechanism is committing a criminal offence.
“While it is true that many people lost jobs during the lockdown, it is not advisable to approach illegal money lenders. However, there is no need for any operation at the moment to rein-in the illegal money lenders. People should approach the local police with a complaint. If the police finds the complaint genuine, they will surely take action against the money lenders,” he said.
‘Operation Kubera’ by the state police to curb the menace of ‘blade mafia’ failed in many regards
In Neyyattinkara, more than 100 money lenders are operating at markets and autorickshaws and taxi stands.
People from middle and upper-middle-class families are falling prey to digital loan sharks
INSTRUCTIONS TO STAY CLEAR OF FAKE LOAN APPS
Do not depend on any unscrupulous mobile app offering short-term, instant loans. Do not download any .apk (Android package) file. Verify if these NBFC-backed loan apps are genuine by referring to the RBI website. Borrowers are advised to raise a complaint with the Cyber Crime Police station for any kind of harassment by loan apps and not to take any decision in haste. Genuine loan providers never offer money without verifying documents. Instant loan providers have a tie up with NBFC’s to provide loans. This is because the rate of interest is high and the repayment period is less compared to reputed banks. Avoid taking loans from these applications as they harass borrowers by accessing their contacts/gallery and sending messages to people known to them, said K Sanjay Kumar Gurudin, DIG (south zone).
Psychiatrist’s take on suicides
“The Covid outbreak and the consequent lockdown have severely impacted the lives of small-scale businessmen and entrepreneurs, who had taken huge loans to establish their businesses. Mounting stress due to the inability to repay loans, boredom and anxiety about the future have affected their state of mind. Adding to that, domestic conflicts and difference of opinion with family members and friends worsen the situation further. Social support measures coupled with proper awareness of mental health issues and training all people in society to provide mental-health first aid is mandatory to keep such
problems under check,” said Dr Arun B Nair, psychiatrist, Government Medical College, Thiruvananthapuram.