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Small borrowers of Goalpara district in great distress

By ROOP CHOUDHURY - 15 Sep 2010 12:00 AM GMT

GOALPARA, Nov 8 - Most of the members belonging to various self-help groups (SHGs) and joint liability groups (JLGs) are finding it difficult to repay their small loans taken from various Micro Finance Institutions (MFIs), and the situation for them has become critical after several months of the Covid-induced lockdown, during which most of the economic activities came to a grinding halt.

More than 20 microfinance institutions, besides private finance companies, including Bandhan Bank, RGVN, Ajagar Finance Pvt Ltd, Arohan, etc, are operating in the district, extending small loans to poor people.

Despite the immense hardship being faced by the borrowers due to the lockdown, some of these MFIs are hellbent on recovering the loan amounts without restructuring or writing off any portion of the interest part and without giving a fair chance to the poor people to come out of their financial distress.

Even though the government has, of late, given a huge impetus on financial inclusion, many microfinance institutions operating in the district have betrayed the aspirations of the poor, be it in fulfilling the objective of poverty alleviation or in providing them with a sustainable source of income with the help of affordable microfinance.

Stories abound in the district of families torn apart by their inability to repay the loans. One such example is Suman Saha (45), a resident of Colony No.2 under the municipal ward No.8 of Goalpara town, who had burrowed Rs 45,000 from Arohan, an MFI, and opened a shop for her husband in their neighbourhood. But, her family started facing extreme financial distress as their startup venture collapsed due to the lockdown. The entire family later fled from their house and their whereabouts are still unknown.

Same is the case with Mamoni Barman (35), a resident of Colony No.2 of Goalpara town, whose husband used to work in a shop and the family was facing economic hardship. Mamoni had borrowed Rs 45,000 from Arohan and opened a grocery shop before the lockdown, with the objective of empowering themselves. But, their venture, too, miserably failed due to the lockdown and the family had to survive on their grocery stocks for sustaining themselves. Debt-ridden and cornered, Mamoni and her family too were was unable to face the ire of her peer loanee group and decided to flee to an unknown place.

Meanwhile, Rajkumar Metei, AGM-DD of NABARD, informed that the number of SHGs, savings linked as on March 31, 2020, is 8,424, while the number of SHGs, credit linked as on March 31, 2020, is 2,048. The number of SHGs, credit linked during 2019-20 (government-sponsored and direct), was 637 and the credit amount sanctioned was Rs 674.99 lakh.

Metei also stated that the information on the joint liability groups and the number of private unregistered MFIs operating in the district is not available with him and he added that the NABARD does not have any control over them.

Ashok Nath, secretary of the NGO Ajagar Social Circle, opined that unregulated lending is the reason behind the financial distress in the rural areas, where borrowers take loans from more than one MFI to pay off other loans. Moreover, several private unregulated MFIs have been targeting the same group of borrowers in the area.

Meanwhile, social activist Noni Das said that a sit-in protest was staged recently demanding waiving of these loans due to the ongoing economic hardship, as the district now has an increasing number of cases of disappearance and borrowers remaining in distress. He regretted that the level of transparency is very low in this sector and it is appalling to see that it remains unregulated with the MFIs� focus woefully being on profit-making rather than on alleviating poverty or serving the poor.