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Loans sharks including Self Help Groups makes life miserable for people in rural TN

- September 23, 2021

Chennai, Sept 23(BPNS)

Post-Covid, the situation in rural Tamil Nadu is miserable after loan sharks including Self-help group members are taking rounds to pester people who have taken money from them.

The loan sharks are on the prowl in the villages of Tamil Nadu with several people losing their motorbikes, four-wheelers and pick-up vans, and even tractors to the usurers.

The interest rate being charged by these loan sharks are heavy with high rates like 20% per month is levied from the gullible borrowers. When the pandemic was ravaging, people were in need of money and several loan sharks surfaced in the villages of Tamil Nadu providing loans. There is a network of lenders who connect the borrower to other lenders to settle the money borrowed. This leads to an unending trap to the borrower making his life miserable.

Shanmughanadhan, 43, a farmer at a village in Salem district while speaking to BPNS said” The loan sharks of this area are all interconnected and they are charging heavily. We don’t have a choice as the banks did not support us and to buy certain essential items for farming we had to resort to the lenders who immediately gives money. However one will understand the trap one is in will be known only later when the money drains out like water and the lender becomes fattier and fattier by the day.”

The Self Help Groups run by women are also providing money at a huge interest rate of more than 20% per month while in general, they provide loans at 4 to 6 % annual interest as the money is being provided by the central government under various schemes.

Sudharani, a private shop employee from Musiri taluk in Trichy said,” I took 10,000 rupees from a woman coordinator of an SHG. She told me that I have to pay 1000 rs per month as interest and I did pay but after some time she told me to pay Rs 1000 per week and now the money has grown into a huge amount and I have stopped paying and lodged a complaint with the local police station.”

Policemen are also tight-lipped and when contacted a Police officer at Musiri police station while speaking to BPNS said, “ We are getting several complaints against cheating and money not being repaid, etc. People take money from the money lenders at higher rates knowing fully well that the rates are exorbitant. We have registered a case and will investigate the matter. The woman coordinator of an SHG is not expected to do this as SHG’s were opened to save people from loan sharks.”

Interestingly both Public sector banks and private banks are charging compound interest and fleecing the people while there was a moratorium announced by the government during the Covid pandemic.

Velusamy, a farmer in Chengalpattu district while speaking to BPNS said, “ We can understand the nature of the private money lenders but the public and private sector banks are charging compound interest even for the moratorium period and when we raise a complaint they try to reduce this.”

A senior official with the State Bank of India at the bank head office at Chennai while speaking to BPNS said, “ The banks are not supposed to charge the interest during the moratorium period and we will look into the matter if complaints are raised.”

Villagers seldom complain against the bankers and this has given more and more strength to the local managers and officers of these Public and private sector banks to charge people heavily without providing any considerations for even the moratorium period.

In many villages of rural Tamil Nadu from North to South, East, and West the situation is dismal and loan sharks, private money lenders, Self-help groups, and even Public and private sector banks are extracting their pound of flesh from the gullible and vulnerable villagers.

While the government of Tamil Nadu with sincere efforts could curtail the spread of Covid pandemic, the loan sharks and local money lenders are turning into a major menace hurting the village and rural life of Tamil Nadu.