PALAKKAD: It was at the beginning of this year that Padmavathi, 33, of Vembaloor, Ariakode, jumped with her two children, aged 10 and 7, into a pond and committed suicide. Around the same time, Sarada, a homemaker from Nellikalkad in Alathur, took the extreme step. Chandran, also from Nellikalkad, decided to end his life by hanging himself at his house nearly a month ago.
Then there were two more similar tragedies, all in the past five months, within 1km. The reason for their suicide was the same — they wilted under pressure after availing loan from micro-finance companies, whose passbooks do not even carry the companies’ name or seal.
Nine of them are functioning in this small area alone. According to social activist Aboobacker Siddique, they give a loan of Rs 1 lakh for a group of 10 women. Each one will get Rs 8,800, which will have to be paid in weekly instalments over a period of 52, 75 or 104 weeks. When the loan nears completion, the same group will be offered Rs 2 lakh. “Not all members need the money, but are made liable for the total amount availed,” said Siddique.
Padmavathi reportedly could not withstand the pressure from the members of her group and the company’s employees. The interest charged is 16 per cent flat which works out at 32 per cent at a diminishing rate. A processing fee of Rs 2,700 is deducted for a Rs 40,000 loan given to a 20-member group. Siddique said when restrictions were imposed by the RBI, capping the interest rate at 24.5 per cent, the processing fee was hiked.