Sadiq Begum (42), a resident of Tiptur in Tumakuru ended her life unable to bear the harassment by loan recovery agents. She had uploaded a video before commuting suicide.
Yashodamma (60), a daily wager from Thimmayyanadoddi in Ramanagara district committed suicide as she was verbally abused by the loan recovery agents for failing to pay the monthly instalment due to ill health. She hanged herself at home when her son was away to arrange money for loan repayment.
In Heggavadipura village in Chamarajnagara district, more than 50 families have locked up their homes and abandoned the village along with their school-going children to escape the torture by loan recovery agents. At least five villages in Nanjangud in Mysuru districts have reported villagers migrating to cities and far-off farms as daily wagers unable to pay exorbitant interest rates on loans.
In a shocking incident, a woman from Magadi who had availed a loan of Rs 2.5 lakh for her husband's treatment ended up selling one of her kidneys to repay the loan.
The villagers complain that the loan defaulters' homes are being sealed by the microfinance companies.
These companies lure people with "easy loans" and offer loans with interest rates ranging from 20 % to 40%. The companies are blatantly violating the norms for loan disbursement and recovery prescribed by the Reserve Bank of India (RBI) and many are illegal as they are not even licensed institutions.
"Why should the companies give huge loans to the poor when their daily earning is less than Rs 400? They should look at the credit-worthiness of the loanee and also relax their norms to allow delayed payments when a person is indisposed and unable to work," said a villager from Ramanagara, adding that the companies were giving loans to anyone with an aadhar card.
In Haveri, women started an envelope campaign - posting their "mangalsutra" to the chief minister of the state seeking his help to end the harassment by the microfinance companies that had led to the men abandoning their homes.
With reports of microfinance companies targeting self-help groups in rural Karnataka, the state government has decided to crack the whip on these exploitative companies and has directed the district administration to intervene. However, the aggrieved have sought relief from the harassment and change in norms that allow delayed payment during exigencies.
Union minister H.D. Kumaraswamy said, "The private money lenders and microfinance companies are looting the poor. But the government is not worried about it. When I was the CM, I had passed a debt relief law to ease their burden. However, the subsequent governments did not pursue it. If the nationalised banks and cooperative banks had simplified the money lending process, why would the poor fall into this debt trap laid by private companies?"
In February 2019, the Kumaraswamy-led coalition government enacted the Debt Relief Act - a one-time relief of waiving off the loans taken by small farmers and landless labourers whose annual income does not exceed Rs 1.2 lakhs per annum.
The waiver was meant to help the vast majority of the agricultural community that depended on non-banking financial institutions for loans. As per the Act, the lenders would get no compensation as they collected a higher rate of interest.
