The interest rate being charged by these loan sharks are steep, with rates as high as 20 percent per month being levied from the gullible borrowers…reports Asian Lite News
Post-Covid, the situation in rural Tamil Nadu is miserable with loan sharks, including Self Help Group (SHG) members, 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, pick-up vans and even tractors to the usurers.
The interest rate being charged by these loan sharks are steep, with rates as high as 20 per cent per month being 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 for the borrower, making his life miserable.
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Shanmughanadhan, 43, a farmer at a village in Salem district, told IANS, “The loan sharks of this area are all interconnected and they are charging heavily. We don’t have a choice as the banks do not support us and to buy certain essential items for farming, we have to resort to the lenders who immediately give us money. However, one understands the trap 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 against a huge interest rate of more than 20 per cent a month while in general, they provide loans at 4 to 6 per cent annual interest rate as the money is provided by the Central government under various schemes.
Sudharani, a private store employee from Musiri taluk in Trichy, said, “I took Rs 10,000 from a woman coordinator of an SHG. She told me that I have to pay Rs 1,000 per month as interest which I did. But after some time, she told me to pay Rs 1,000 per week and now the money has grown into a huge amount. I have stopped paying and have lodged a complaint with the local police station.”
The policemen are also tight-lipped on the matter. When contacted, a police officer at the Musiri police station told IANS, “We are getting several complaints of 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 SHGs were opened to save people from the loan sharks.”
Interestingly, both public sector banks and private banks are allegedly 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, told IANS, “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 it.”
A senior official with the State Bank of India at the bank’s head office in Chennai told IANS, “The banks are not supposed to charge interest during the moratorium period and we will look into the matter if complaints are raised.”
In many villages of rural Tamil Nadu, the situation is dismal and the loan sharks, private money lenders, SHGs, and even public and private sector banks are extracting money from the gullible and vulnerable villagers.
While the government of Tamil Nadu could curtail the spread of Covid pandemic with sincere efforts, the loan sharks and local money lenders are turning into a major menace, hurting the lives of people in rural Tamil Nadu.