In the absence of an alternative, poor people are forced to avail loans on a high interest rate
Despite of all the efforts by the authorities to rid the old city of money-lenders, they have failed in their attempt. The reason: absence of any alternative sources to get money in times of need, encourages money lending in various forms.
Though the police cracked down on the money-lenders on several occasions, they are back to try their tricks in no time. Of late, the business has taken many other shapes such as goods and provisions being sold for payment on instalments; chit fund business and loans being given to buy vehicles.
“The prompt and hassle-free service has gained acceptance over a period of time in absence of any alternatives for the poor people who are largely dependant on it. It will continue to be so until the government works out an alternative,” S. Q. Masood, a social activist, says.
Hundreds of poor people in this part of the city are exploited by the money-lenders who have found out new ways to run their trade. Authorities merely promise low interest or interest-free loans to the poor but fail to implement it. “A few NGO’s had also talked about micro credit but nothing really has happened,” says M. A. Sayeed, a peace activist.
Though people are aware of exploitation they still prefer the money-lenders in absence of any other choice. “What else can we do? No political leader or NGO will come forward to help us when we need money. I had directly approached the banks and also through brokers but did not get anything,” says Abdul Khadeer Khan, an auto driver.
He had recently availed a loan of Rs.10,000 to refurbish his auto-rickshaw and has to repay about 14,000 in next two months.
It is not only money that changes hands a few simply provide rice and other provisions on instalments. All a person has to do is shell out Rs.100 and take home a bag of rice worth Rs.800 and later pay back in easy instalments. It is a similar case for goods such as furniture, TVs and two-wheelers.
Basically these are bought to be gifted as dowry.