Meerut: Ashish Gupta (42), a small-time pharmacist from Shahjahanpur in UP, was found hanging along with his wife Rishu (39). June 7th, 12 year old son and 9 year old daughter. Wanting to build a house and expand his business, he took a loan of 1.2 million rupees from an informal money lender after bank loan approval was not approved. In two years, he repaid Rs 37 million. An annual interest rate of 120% was being charged. However, the principal amount remained unchanged. He saw no end to his debt.
Predatory lending is designed to fail. These don't require any paperwork or background checks, meaning you can get your money quickly, but they also trap borrowers in a cycle of debt they can't break out of. And they are taking away renters from small towns in UP and literally 'killing' them.
“Ashish was murdered. Those moneylenders killed my son. It was not a suicide,” said his father, Ashok Gupta, a retired doctor. Moneylender Avinash Vajpayee was arrested.
Prince Sonkar (26) ran a small vegetable and fruit shop in Lucknow. In August last year, he died after ingesting poison after months of harassment by moneylenders who loaned him Rs 20,000 to expand his business. “He repaid them double the amount,” said his mother Jyoti. “The men who drove him to suicide have now been released. There was no evidence.”
Because of the way these loans are made (there is no paper evidence), evidence of harassment is difficult to obtain. In any case, these loan markets are not regulated the way they should be. “Under the UP Regulations of Money Lending Act, 1976, anyone can write a letter to a district judge and fill out a form to become a licensed money lender. Interest rates are not supervised by the government.” said Rajveer Singh, a lawyer who helps people targeted by loan sharks. “Lenders charge a minimum of 20 to 30 percent interest. When they find a soft target, such as an illiterate person or someone in dire need, they attack 100 percent.” Not having documents means , meaning that borrowers often cannot seek help from the police unless the situation becomes serious.
As in the case of daily wage worker Devender Saini, who entered the Meerut SSP's office on Tuesday, took poison in front of the police, and repaid Rs 250,000 for a loan of Rs 100,000 in 18 months. told him that he was still alive. He is being harassed by Rinku Gujjar, a moneylender. Saini fled, leaving behind his wife and four children.
Because of the shame and sense of failure that comes with debt, many people who fall into this trap do not tell their families, thus leaving the lender free. Chandrapal, who goes by his first name, was a 65-year-old teacher from Bareilly. “On June 30, he committed suicide. He left a suicide note saying he had to step out due to debts. His family knew nothing,” said Sanjeev Yadav, the investigating officer in the case. “In such cases, you have no choice but to comply with the lender's claims.”
