KHARAMUNGI: K Chandramma and her husband are the newest entrants to India’s farm debt industry. She helps run a self-help group of 18 women in this village in Sangareddy distric, which borders Karnataka and is 168 km from Hyderabad.
The village is readying up for rabi sowing. Many of the villagers are Dalit tenant farmers. Chandramma and her husband decided to cultivate sugarcane this year. Already late to sow, they needed an urgent need to borrow Rs 30,000 from the nearest Andhra Pradesh Grameen Vikas Bank, 25 km away in Narayankhed, a town with just one other bank, SBI.
That was when demonetisation struck. There are only three buses to Narayankhed; some days none. And then the bank, which had never said no to Chandramma in the past, refused to lend to her this time. So she turned to a money lender, borrowing at a monthly interest rate of 3 per cent or 36 per cent annually .
As Chandramma speaks, two men join her side and she stops talking. Gunendar Rao and T Nandu Singh are both money lenders and do not seem pleased that Chandramma is talking to the press. “Everything is fine here,” one of them says.
“People are just a bit inconvenienced here. The banks will sort things out.”Gunendar Rao decides to justify himself. “I don’t charge too much, just 3 per cent, which amounts to Rs 900 a month for Rs 30,000. I’m trying to help these farmers because the banks aren’t giving them any money.”
Nandu picks up the theme, “Now the banks don’t have money to give, so they come to us. We don’t have any problem accepting their Rs 500 and Rs 1,000 notes.”
There are whispers that the moneylenders take a cut of Rs 100 from each demonetised note.
Kharamungi is separated from the Karnataka border by the Manjira river. Villagers can choose to cross the river and travel to Bidar, a distance of 15 km, or travel 40 km by public transport to the nearest agricultural market in Bidar. It is easier to get demonetised notes exchanged there than go to the Narayankhed banks. Narayankhed is the connecting point for 43 villages in Manoor mandal, serving over 50,000. Last Thursday, there were long queues snaking out of the town’s two banks. The only ATM was closed in the morning and had a long queue in the evening.
Back in Kharamungi, Pushpa Thakur and her husband don’t own the home they inhabit with their son. In 2015, they borrowed Rs 40,000 from a money lender to farm a land they leased. The banks did not give them credit as they don’t own the land. But the Manjira flooded that year, resulting in crop losses for most farmers in this village including Pushpa Thakur and her family.
Pushpa switched to selling cow’s milk to Vijaya Diary to get by. But the dairy company has not made any payments for October and November. “Everytime we ask them, they say next week. Now they say they don’t have money,” says Pushpa. She is afraid she will default on her payments to the moneylender.
Demonetisation was sprung upon Kharamungi at a time when rabi crop sowing season was due. Now with banks and microfinance companies not lending to farmers owing to the currency shortage, farmers are left with no option but to approach the local moneylenders.