By Neeraj Mishra
Micro-finance schemes, Jan Dhan Yojana and women’s Self-Help Groups (SHG) may have been the toast of many presentations on development. But they have introduced rural women to the new world of debt trap and suicides.
More than 40,000 women and a Rs 350-crore loan scam involving 45 banking institutions in Chhattisgarh has led several women and agents to suicide.
Chhattisgarh has produced the latest playbook on how small loans taken by a large number of debtors can enrich a crooked few. Banks and micro-finance companies have penetrated far-flung villages of Chhattisgarh taking advantage of several dozen government schemes which have opened opportunities for loans to the rural poor. While the Central government proclaims loudly its successful schemes like Jan Dhan, National Rural Livelihood Mission (NRLM) and Swayamsidha, it has not been able to safeguard beneficiaries from sharks. Handing out small loans to the uninitiated and uneducated can be a dangerously lucrative for those waiting to twist the system.
More than 40,000 women in Korba, Balod, Gariaband, Janjgir, Raigarh and Dhamtari districts of Chhattisgarh have been duped by smart operators who first withdrew small amounts as loans in their names and then vanished with the money. As the micro-finance companies and banks now pressure the debtors, at least three women and three agents have committed suicide. Several families have escaped from their villages to avoid the constant badgering. And all for loan amounts ranging from Rs 50,000 to Rs 3.5 lakh. The police has so far been unable to pinpoint or arrest the perpetrators though the contours of the crime have been unravelled.
At least two companies have been named: Flora Max of Korba and Saptarishi of Balod. These companies would send out their agents to contact women in rural areas and goad them to form SHGs and Joint Liability Groups (JLG). Then these agents would approach the banks to apply for loans in the name of these women and their SHGs. The women would be told the loan money is being invested in these big companies and they have nothing to fear as the instalments would be paid by the company. Women would also get between 10 and 25 per cent of the loan amount upfront which would buy their peace and settle their doubts.
Even a cursory glance at the plan will reveal the bank managers would be complicit but may not be the case always. Some instalments were paid by the company through their agents to keep up appearances and entice more women. A typical loan application would unfold like this: The agent would take the leader of the SHG to the bank with all relevant papers and make an application under any of the NRLM schemes. The woman would, as the leader of her SHG, get some cash but would be entirely under the impression that she or her group would not be under any liability even though she would sign all the loan papers. The scam ran so smoothly and more than 40,000 women fell prey to the smooth talk of the agents because they are usually people from their area, talk their language and know their families.
Ten nationalised banks and 35 micro-finance institutions have been named by Korba Police as being involved in the elaborate scam which netted more than Rs 350 crore for the perpetrators. But it could not have been possible without the connivance of fund managers and even government officials responsible for keeping a tab on SHGs and NGOs in their districts. The SHGs and NGOs are audited by the district CEO and the Collector and it is impossible to accept that they would not have been able to see through such a plain plan.
The other side of the story is horrific. The SHGs are large group of women but JLGs can be very small and usually involves two or three women in whose name loans were withdrawn. This would usually be for some small business or extension of an existing one. Both fake of course. The JLG women were convinced that the money is free government grant like Mahtari and Bahin Yojana and need not be returned and the agent would take care if anything arose. Here the complicity of fund managers is obvious as they did everything knowingly. Some agents themselves are now under pressure by villagers to return the money or face violence, while bank managers can escape responsibility because the banks have in their possession signed loan papers by the JLGs. The end liability is, of course, of the women who have signed.
The end result for villagers in the district is also pitiful. Apart from the suicides and pressure to return money they don’t have, now they have been blacklisted en masse of doubtful credit integrity by nationalised banks, so they are unable to get loans. The only ones laughing all the way to and from the bank are the perpetrators of the smart project.