Sonpur: High-interest loans from private microfinance companies are adding to the financial burden on women’s self-help groups (WSHGs) in Subarnapur district, prompting calls for administrative intervention.
More than 10 private lending firms reportedly operate in the district, charging annual interest rates of 30-40%.
In comparison, eligible self-help groups can access bank loans at subsidised interest rates of around 7%, with provisions for interest reimbursement for groups that repay regularly, according to the report.
The district has 8,947 women’s self-help groups, each generally comprising 10-12 members.
The Centre and the state government facilitate bank loans of up to Rs 10 lakh for such groups to support their livelihoods and economic activities.
However, groups with outstanding loans often struggle to secure further bank credit until their existing dues are cleared.
Women who urgently need money for family expenses, including their daughters’ weddings, are consequently turning to private lenders offering quicker access to funds at higher interest rates.
The firms reportedly collect repayments in weekly instalments on fixed days.
Women unable to pay on time face considerable pressure, with some reportedly borrowing from other sources to meet their instalments, increasing their financial difficulties.
Concerns have also been raised over allegations that some women in the district died by suicide in recent years after being unable to repay loans.
Local residents and intellectuals have urged the district administration to examine private lending practices, ensure transparency in interest rates and repayment terms, and improve women’s access to affordable institutional credit.
They have also called for greater awareness of available bank loan schemes so that women’s self-help groups can make informed borrowing decisions and avoid excessive debt.