KHARAMUNGI: I was poor then, I’m poorer now,” said K Chandramma matter-of-factly.
When this correspondent visited her in the days after demonetisation last year, she and her husband K Matthaiya had been thrown into the arms of the village money-lender. They needed D30,000 to sow sugarcane on a portion of the 1.23 acres that they own in this village on Telangana’s border with Karnataka.
Thanks to the note ban, microfinance institutions like the Andhra Pradesh Grameen Vikas Bank (APGVB) had stopped lending due to the cash crunch and so they turned to moneylender Gunendar Rao. He lent them D45,000 at a monthly interest rate of 3 per cent.A year later, when we visited her again, Chandramma’s owings to four moneylenders have ballooned to D3 lakh. They have not made any repayments for six months now.
But demonetisation has taught her the art of loan servicing. “I now take money from one lender to repay another,” she said. “The sahukars come every month but they are polite and do not humiliate us.”
It was of course not demonetisation’s fault that the just 15 days after they planted sugarcane, they lost the crop to a herd of deer. They turned to the Telangana horticulture department for assistance. In January they dug pits to plant mango saplings. But the government assistance never came.
Meanwhile, Chandramma’s salary at the village school, where she works as a housekeeper, was slashed from D 3,000 to D2,000 following budget cuts due to a fall in student enrolment. Matthaiya does sanitation work in the same school. His salary too took a dive from D 3,000 to D2,000.
To put it in perspective, their monthly debt burden is D 25,000 wh ile income is D4,000.
The freeze on microfinance following demonetisation, which continued till August 2017, also affected the self-help group (SHG) that Chandramma helped run for 12 years. The group, which had 20 members, has not met in three months.
Chandramma said her SHG women had never defaulted on loans till 2016.
Narayankhed, the town nearest to Kharamungi, has only two banks: APGVB and State Bank of India. They cater to 43 villages in Manoor mandal with a total population of 50,000. Since the 2016 visit, Express noticed that the banks had become more inaccessible. In 2016, there were three buses daily to Narayankhed. Now there were none.
Matthaiya could have done with a bus. So now with the buses gone, Matthaiya has to spend Rs 120 on share autos on each round trip. The year of demonetisation has spawned a new species in Kharamungi – loan brokers. To serve seekers like Matthaiya, these personages pitch tent outside banks promising to help raise a loan. Outside APGVB, broker Rajappa promised to help this reporter with a loan: “The bank is not giving any crop loans now. But come after two months with all documents and I’ll get you a loan within a week.”Rajappa’s service comes at a cost: D5,000 per loan of one lakh.